TMI Blog1972 (8) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... Judge(s) : SATISH CHANDRA., N. D. OJHA. JUDGMENT The judgment of the court was delivered by SATISH CHANDRA J. - This is a consolidated reference for four assessment years 1948-49 to 1951-52. The Tribunal has submitted this statement of the case to this court for its opinion on the following questions of law. " (1) Whether, in all the facts and circumstances of the case, and having regard to the proper legal effect of the various documents, the assessee-firm consisted of Jageshwar Prasad Agarwal and Sir Padampat Singhania, L. Lakshmipat Singhania and L. Kailashpat Singhania or it consisted of the said Jageshwar Prasad Agarwal and the three trustees of the Kamla Town Trust ? (2) Whether the finding of the Tribunal to the effect th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tment's plea. This court I confirmed that finding. It was held that no genuine partnership came into existence by which the Kamla Town Trust became a partner. This court observed : " Even if it be assumed that the trust deed dated 27th October, 1941, survived even after its rectification in August, 1945, it will be seen that after considering various aspects of the case, the Income-tax Appellate Tribunal recorded a finding that the three Singhania brothers exploited their dual capacity and made an arrangement by which it was made to appear that the trust was doing business, although, in fact, the same was conducted by the three Singhania brothers in their individual capacity. In other words, the finding recorded by the Tribunal was that, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osiery and became partners in their individual capacity. This also showed that the three Singhania brothers were utilising the name of the trust at their sweet will. The Tribunal attached importance to the fact that when the trust entered into partnership with J. P. Agarwal it was agreed that the goodwill of the firm would always remain with the trust, but when the trust retired from this business and the three Singhania brothers became partners in their individual capacity, the goodwill was again got re-vested in the original partners. According to the Tribunal, all these facts indicated that the transaction of partnership between the trust and J. P. Agarwal was a mere camouflage and the business of the firm was, in fact, being conducted b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence on 15th January, 1946. It observed that, if the document was not genuine, the deed of partnership dated 5th February, 1946, would also become equally unreliable. " The same position obtains in the present case. The Tribunal has drawn certain inferences from the material and circumstances appearing on the record and we cannot hold that the Tribunal committed any error of law in doing so. Question No. 1 has thus to be answered by saying that the assessee-firm consisted of J. P. Agarwal and the three Singhania brothers and the three trustees of the Kamla Town Trust were not partners in this firm. Learned counsel for both the parties are agreed that in view of our answer to the first question, questions Nos. 2 and 3 are merely conseque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chargeable for that year, or owing to the profits or gains chargeable being less than the allowance, then, subject to the provisions of clause (b) of the proviso to sub-section (2) of section 24, the allowance of part of the allowance to which effect has not been given, as the case may be, shall be added to the amount of the allowance for depreciation for the following year and deemed to be part of that allowance, or if there is no such allowance for that year, be deemed to be the allowance for the next year, and so on for succeeding years." The proviso deals with every assessee. It specifies that where the assessee is a registered firm then in the assessment of its partners if full effect cannot be given to any depreciation allowance an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee-firm. For this the Tribunal has given several reasons. It held that the gift was not in cash. It was merely by a book entry in the account books of the assessee-firm. On January 1, 1946, the date when the entries regarding the gift were made the firm had only Rs. 27,000 as cash in hand and in the bank. That would show that no cash transfer took place. It also relied upon the circumstance that the gift was made to the trust on the condition that the trust will invest this amount in the assessee-firm so that it becomes a partner therein. Such a conditional gift by the three Singhania brothers in favour of a trust, which was exclusively being managed by them, was in the context of the other fact a bogus transaction. In the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
