9911796707
TMI Blog1996 (1) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... ut following the statutory provisions of section 14 of the Abkari Act. The said section lays down that the lessee of liquor business cannot take partners without prior permission of the Government. The Income-tax Officer refused registration holding that the sub-partnership contravened the aforesaid provision and hence, it was void and unenforceable, being formed only to share the profits of abkari business. The said view was confirmed by the Appellate Assistant Commissioner. However, on the assessee's further appeal, the Income-tax Appellate Tribunal held that the sub-partnership had all the insignia of a valid partnership and was required to be registered. The following question was referred by the Tribunal at the instance of the Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isting of one of us, B. P. Jeevan Reddy J. and B. N. Kirpal J., in Bihari Lal Jaiswal v. CIT [1996] 217 ITR 746 ; [1995] 6 Scale 508, had an occasion to consider the question whether the income-tax authorities were bound to register a partnership-firm which was contrary to the provisions of the State Excise enactment. In the aforesaid decision, it was held that such partnership could not be registered under the provisions of the Income-tax Act. In this connection, the following observations were made by the Division Bench : "....any agreement whereunder the licence is transferred, sublet or a partnership is entered into with respect to the privilege/business under the said licence, contrary to the prohibition contained in the relevant exci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch sub-partnership was merely a loan transaction or a financial agreement and if it was merely a financial agreement whether it could ever constitute a partnership within the meaning of section 4 of the Indian Partnership Act, 1932, which reads as under : " 'Partnership' is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all." He submitted that even assuming that this court in Degaon Ganga Reddy's case [1995] 214 ITR 650 held that this sub-partnership was merely a financing agreement or was entered into to finance the business of a partner, the business of the sub-partnership was obviously to inter se share the profits of the main abkari partnership business whi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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