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TMI Blog1991 (9) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the Income-tax Act, 1961, reads as follows : "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in holding that the minors admitted to the partnership should not be taken into account in finding out whether the number of partners exceeded the maximum number of twenty who would constitute the firm ? " The assessee claimed the status of a firm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue. Under the provisions of the Indian Partnership Act, a minor cannot be a partner because a minor is not competent to enter into any contract. A minor can only be admitted to the benefits of the partnership. Therefore, the law which enables the formation of a partnership, that is, the Partnership Act does not recognise a minor as a partner at all when a minor is admitted only to the benefit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctively a firm and the name under which the business is carried on is called the firm name. Partnership is, as such, the result of a contract. A minor, not being competent to enter into a contract, is incapable of becoming a partner, although he can be admitted to the benefits of partnership. The Hon'ble Supreme Court in CIT v. Dwarkadas Khetan and Co. [1961] 41 ITR 528 has laid down that in view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s upon the minor by treating him as a partner ; but it does not render a minor a competent and full partner. For that purpose, the law of partnership must be considered, apart from the definition in the Income-tax Act'. The said decision of the Allahabad High Court has been affirmed by the Supreme Court in S. L. P. No. 11821 of 1991 decided on July 12, 1991. We have no hesitation in agreeing with ..... X X X X Extracts X X X X X X X X Extracts X X X X
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