TMI Blog1968 (12) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... A deed of partnership relating to this partnership was executed on the 21st August, 1951. One of the three partners, Jaisingh Narandas, was a minor and had been shown as a full-fledged partner in the partnership and the deed of partnership was signed on his behalf by the power-of-attorney holder of his father. For the assessment years 1953-54 and 1954-55, registration was refused to the firm mainly on the ground that, since a minor had been made a full-fledged partner of the firm, the partnership was invalid. The partnership constituted on 7th July, 1951, and evidenced by the deed of 21st August, 1951, was for a period of two years, i.e., until the end of S.Y. 2009 and, therefore, was to expire on the 6th of November, 1953. The partners, however, decided to continue the partnership after the expiry of the original term of two years and, consequently, on the 7th of November, 1953, made an endorsement on the partnership deed that the partnership was to be continued at will on the same terms as contained in the original partnership deed. It may be mentioned that the minor partner, Jaisingh Narandas, had attained majority on 20th June, 1953, that the endorsement made on the partnershi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artner. Against the decision of the Appellate Assistant Commissioner the department went in appeal to the Income-tax Appellate Tribunal. The Tribunal relied on the Bombay High Court decision and the decision of the Madras High Court in Jakka Devayya Sons v. Commissioner of Income-tax and of the Patna High Court in Sahai Brothers v. Commissioner of Income-tax, which took the same view and dismissed the appeal. Now, what is contended before us by Mr. Joshi, learned counsel who appears for the department, is that the decisions of the Bombay, Madras and Patna High Courts, on which the Tribunal has relied, have been overruled by the Supreme Court in Commissioner of Income-tax v. Dwarkadas Khetan Co., which was an appeal from the decision of the Bombay High Court. It was held in that case that a partnership deed, in which a minor was admitted as a full-fledged partner, was not valid and could not be registered under section 26A of the Indian Income-tax Act. It is, therefore, contended on behalf of the department that the basis of the decision of the Appellate Assistant Commissioner and the Tribunal having been found to be wrong, their decisions must be set aside and the view taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o carry on business, had continued to be in existence. The document constituting this partner ship was the document of the old partnership with the addition of an endorsement thereon stating that it was continued on the same terms as contained in the original document. Now, in the partnership evidenced by the original document, one of the partners was a minor, but in the continued partnership there was no minor partner since the erstwhile minor had become a major by that time. As to the other terms on which the old partnership was carried on, there was nothing to make it an invalid partnership. Whatever defect may have been in the old partnership, it lasted till the end of S.Y. 2009 and in the subsequent partnership which continued in the S.Y. 2010 and the subsequent years there was no such defect since all the three persons, who had agreed to be the partners thereof were all major persons and there was, therefore, nothing illegal or improper in the formation or constitution of the said partnership. What has been urged by the learned counsel appearing on behalf of the depart ment is that the endorsement, not having been signed by Jaisingh, who had attained majority by that time, bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deed and the subsequent document executed on 24th February, 1955. By this document Jaisingh, the erstwhile minor partner shown in the first partnership deed, had in terms confirmed and accepted all the terms and conditions of the said partnership deed and all rights and obligations thereunder together with the benefits and liabilities thereof with effect from the date of the original partnership as if he had been a full and effective partner all along. Whatever might have been the defect in the original partnership as formed and whatever might have been the consequences of the said defect until the date of attaining majority by the minor or until the date of the latter document dated 24th February, 1955, there can be no doubt whatsoever that as and from the date of this document, viz., 24th February, 1955, Jaisingh had accepted all responsibilities of a full-fledged partner of the partnership firm and the firm which continued thereafter had accepted Jaisingh as a full-fledged partner thereof. For the account year corresponding to the assessment year 1956-57, therefore, the effective partnership, which existed and which was constituted under the two documents was a legal and valid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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