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TMI Blog1967 (7) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... of this court on the following question ? "Whether, on the facts and in the circumstances of the case, the income-tax authorities were justified in refusing registration under section 26A of the Act ? " Under a deed of partnership executed on January 10, 1948, a firm was constituted for the purpose of carrying on business in the name and style of M/s. Ganeshi Lal Lakshmi Narain Lal. The members ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tnership deed had been executed. He also found that the profits of the business carried on under the name " Standard Hotel " had not been divided at the end of the previous year. The assessee preferred an appeal before the Appellate Assistant Commissioner, who allowed the appeal and directed renewal of registration. The Income-tax Officer proceeded in appeal to the Income-tax Appellate Tribunal, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, to opt out of the partnership and in the absence of such election, the minor, on attaining majority, must be deemed to have become a full-fledged partner of the firm. Now, while that may be so for the purposes of the partnership law, the question is whether it satisfies the requirements of the income-tax law in respect of registration of a partnership firm. Section 26A of the Indian Income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o him as a partner. According to the deed there were only two partners. Clearly, that deed cannot serve as an instrument of partnership under which a firm consisting of three partners, Muneshwar Prasad, Satchidanand and Om Kumar, is constituted. The income-tax authorities were plainly right in the view taken by them that there was no instrument of partnership specifying the present constitution of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d annually between the partners and it is necessary for a firm applying for registration to state that in the application : (Surajmalls v. Commissioner of income-tax). Indeed, in the instant case such statement was made in the application but there is no dispute that the annual profits of the Standard Hotel business were neither divided nor credited between the partners. That being so, it is clear ..... X X X X Extracts X X X X X X X X Extracts X X X X
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