TMI Blog1970 (3) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal has clearly stated the facts out of which the reference arises. Those facts may be stated, in order to appreciate the point in issue. Simhadri Narasingh Prusty and Chinnam Judhistir Patro constituted a partnership business. They carried on business from 1948-49 onwards. It had been granted registration under, the Indian Income-tax Act, 1922, upto and including the assessment year 1959-60. Judhistir Patro was a partner in this firm representing a Hindu undivided family consisting of himself and his sons. On January 6, 1959, there was a partition in the family and the share of Judhistir Patro in the firm was allotted to his minor son, Budhibaman Patro. The partition was effected by a registered deed and was given effect to under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1959- the date which it purports to bear-but on a subsequent date after he was called upon to establish that he had paid the capital of the partnership to the tune of Rs. 5,000. The Income-tax Officer having come to the conclusion that the promissory note was ante-dated and was not in existence on September 30, 1959, held that the entire arrangement creating a new partnership was a subterfuge for evasion of tax. The petitioner carried the matter in appeal before the Appellate Assistant Commissioner of Income-tax who confirmed the finding of the Income-tax Officer. The matter then came up before the Income-tax Appellate Tribunal at the instance of the petitioner. The Tribunal did not examine the facts assailing the finding that the partn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vijayakumar Motilal v. New Zealand Insurance Co. Ltd. In paragraph 13, the learned single judge has dealt with the implications of this concept and it is not necessary to multiply authorities on the point. In the context of the aforesaid legal position, the view of the Tribunal, in the balanced form in which it is put, cannot be supported. The Tribunal has not examined the question whether the execution of the promissory note by the father in favour of the minor was beneficial to the interest of the minor. In that connection, the Tribunal ought also to have examined what was the interest of the minor in the assets of the partnership. If, for instance, the assets of the partnership firm on September 30, 1959, were more than Rs. 5,000 at w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be disposed of finally without the Tribunal going into these questions of fact. It tried to rest its conclusion merely on legal views without recording findings on these matters. On the aforesaid analysis we would answer the question thus : Without recording a finding that the arrangement in the partnership deed dated October 1, 1959, was a mere subterfuge, the application for registration cannot be rejected. If the arrangement is found to be genuine and not a subterfuge, then the application for registration cannot be rejected unless there is a further finding that the arrangement was detrimental to the interest of the minor and cannot be given recognition by the court. In the result, the reference is accepted. In the circumstances, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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