TMI Blog1973 (1) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... . Later, on April 4, 1961, a deed of partnership came to be executed between himself and his son. At that stage, the son, Pandurangan was aged 19 years. An application was filed for registration of the said firm for the year ending with March 31, 1962. The Income-tax Officer, taking into account clauses 9 and 10 of the partnership deed, held that there was no relationship of partners between the said Subramaniarn Chetty and his son, Pandurangan, inasmuch as Panduragan derived his right and power only by consent of big father. In that view, the Income-tax Officer rejected the application for registration. There was an appeal to the Appellate Assistant Commissioner, who, however, held that the two conditions for bringing into effect a partner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubramaniam Chetty, the father, and his son, Pandurangan. The learned counsel also submits that the interpretation placed on clauses 8, 9, 10 and 16 by the Income-tax Officer as well as by the Tribunal cannot be sustained in law, and the view of the Tribunal that clauses 8 and 9 of the partnership deed clearly abrogate altogether the agency principle is not tenable at all in view of the decision of the Supreme Court in K. D. Kamath Co. v. Commissioner of Income-tax. On a due consideration of the matter, we are of the opinion that the learned counsel for the assessee is right in his submission. The decision of the Supreme Court mentioned above is of considerable assistance to the assessee in this case. Clauses 8, 9, 10 and 16, on which r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... factors in finding out the existence or otherwise of the relationship of partners as per the terms of the partnership. The Tribunal has purported to follow the decision of the Mysore High Court in Commissioner of Income-tax v. K. D. Kamath Co. in support of its view that the control and management of the business by one partner is decisive of the question of the existence of the relationship of the partners. But we find that the said decision of the Mysore High Court in Commissioner of Income-tax v. K. D. Kamath Co. has now been reversed by the decision of the Supreme Court in K. D. Kamath Co. v. Commissioner of Income-tax. In that case also the exclusive power and control of the partnership business was vested in one of the partne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one lakh of rupees, each partner contributing a moiety. The terms of the partnership deed, read as a whole, clearly show that all the ingredients of the partnership were satisfied. It is, therefore, not possible, from the mere fact that the management of the business has been entrusted to one of the partners, to hold that there is no firm in existence. We are, therefore, of the view that the partnership in question is entitled to get registration, and the order of the Tribunal refusing registration cannot be sustained. The question referred to us has, therefore, to be answered in the affirmative and against the revenue. The assessee is entitled to get his costs from the revenue. Counsel's fee Rs. 250. Question answered in the affirmative ..... X X X X Extracts X X X X X X X X Extracts X X X X
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