9911796707
TMI Blog1966 (8) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... e Commissioner directing the assessment of the assessee as an unregistered firm ?" The firm applied for renewal of registration under section 26A of the Indian Income-tax Act, 1922 (hereinafter referred to as the Act), for the assessment years 1960-61 and 1961-62 and the Income-tax Officer, by his orders dated 30th November, 1960, and 21st August, 1961, granted renewal of registration for the said two assessment years. The Commissioner of Income-tax, Kerala, felt that the renewal of registration was wrongly granted. He therefore instituted proceedings under section 33B of the Act and came to the conclusion that the firm was not entitled to registration. The registration was therefore cancelled and the Commissioner further directed that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and he having been admitted to the benefits of the partnership, has elected to become a partner thereof." By this deed there were four adult partners and the two remaining minor sons continued as minors, and as we understand the document, admitted to the benefits of the partnership. This document also contained a clause about the sharing of profits and losses which is clause 11 and which is in these terms: "The profits and losses of the firm including loss of capital shall be divided between and borne by the parties in proportion to their share." These are the facts which we consider necessary for determining the question as to whether the renewal of registration sought by the assessee-firm for the two years has or has not been rightly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th members thereof to the benefits of the said partnership but not to the liabilities thereunder." There is a provision in clause 8 of the document which is very similar to clauses 7 and 11, respectively, of the partnership deeds in this case, annexures "A" and "B", which read thus: " The losses are agreed to be shared by the members in the like manner." The document that was construed by the Supreme Court in the earlier decision in Commissioner of Income-tax v. Dwarkadas Khetan and Co. did not contain any clause which indicated that the minors were only admitted to the benefits of the partnership. The court came to the conclusion that no distinction whatever has been made between the minors who were sought to be made partners and the ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gives rise to a right enforceable by or against the firm. We do not understand clause 8 of the deed of partnership as indicating the creation of a personal liability on the part of the minors for the acts of the firm. All that it does, in effect, is to provide that the shares of the minors are liable for the acts of the firm; and that is certainly permissible under sub-section (3) of section 30 of the Indian Partnership Act, 1932." We do not think that clause 4 in annexure "A" and clause 11 in annexure "B" in the two partnership deeds concerned have provided for anything other than what has been done in clause 8 of the partnership deed which we then construed. If there has been no imposition of personal liability on the minors, section 30 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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