TMI Blog1996 (9) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... egarding the division of profits made by the firm among the partners, the assessee is entitled to registration on the basis of Form No. 11 filed by it ?" The assessee is a partnership firm. The assessee in the assessment year 1975-76 has applied for registration of the firm. The firm has been constituted with three partners. The application for registration in Form No. 11 has been filed on March 31, 1975. The partnership deed in original with a copy thereof has been filed. The assessee was requested to produce evidence to show whether the profit of the business has been fully apportioned among the partners and credited to the respective accounts. In reply the assessee stated that the firm is not maintaining any regular accounts and that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in granting registration. It was further submitted that the assessee is expected to file a statement of account when an application for registration under Form No. 11 was filed. In the present case, the assessee neither produced any account books nor produced any evidence to show that the profits were divided among the partners as per the profit-sharing ratio in the partnership deed. Learned standing counsel further submitted that the fact that the statement of account was filed along with the return of income would not entitle the assessee to ask for registration of the firm when the statement of account was not corroborated with the account books. Learned standing counsel relied on a decision of the Andhra Pradesh High Court in Shri Vijay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be said to have satisfied the conditions required for registration of the firm. The Tribunal pointed out that Form No. 11 which is the application for registration does not require immediate division but even a future division will be sufficient because the expression used in para.4 of this application is "profits (or loss if any) of the previous year" will be divided. According to the Tribunal, a mere declaration that the profits will be divided in future would be sufficient to comply with the conditions prescribed in Form No. 11. In support of this line of reasoning, the Tribunal relied on a decision of the Orissa High Court in Rao and Sons v. CIT [1965] 58 ITR 685, wherein it has been held "that even when an assessee had prepared a state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact-finding authority, accepted that the profits were divided among the partners as per the profit-sharing ratio in the partnership deed on the basis of the oral evidence tendered by the partners and the statement of account filed along with the return of the firm. When the Tribunal on analysis of the facts came to the above said conclusion, it is not possible to take a different view by this court while exercising its jurisdiction of rendering its opinion. According to the facts arising in Shri Vijayalakshmi Rice Mill Contractors Co. v. CIT [1990] 181 ITR 263 (AP), the Income-tax Officer asked the assessee to produce the accounts. When the accounts were not produced, the Income-tax Officer drew an adverse inference, which adverse inferen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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