TMI Blog1985 (5) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... passed in respect of M/s. W. L. Kohli Co., for the assessment years 1960-61 and 1961-62 by the Commissioner of Income-tax, Delhi, under section 263 of the Income-tax Act. The background of the case was that the Income-tax Officer had treated M/s. W. L. Kohli Co. as a registered firm and assessed the firm to an income of Rs. 43,247 for the assessment year 1960-61 and to an income of Rs. 1,78,234 for the assessment year 1961-62. The registration was granted under section 183(b) of the Act. The Commissioner of Income-tax issued a notice on the ground that the order was prejudicial to the Revenue and erroneous. After hearing the objections, the Commissioner was of the view that M/s. W. L. Kohli Co., was not a partnership, but was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtnership and M/s. W. L. Kohli Co. belonged to Shri Kohli, individually. An appeal was taken to the Appellate Assistant Commissioner who set aside the orders of the Income-tax Officer and remanded the case to make fresh assessments for the two years. The Income-tax Officer then went into great detail and came to the conclusion that there was a valid partnership. The case of W. L. Kohli was that he gifted Rs. 30,000 to his son on March 31, 1958, by transfer of certain book entries and there was a lot of other materials showing the acts of W. L. Kohli and his son. It was in these circumstances that the Income-tax Officer, after remand, came to the conclusion that there was a genuine firm. He also thought that it was in the interests of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the firm. The circumstances why this admission had been made had been fully explained. Moreover, the assessment made by the Income-tax Officer for 1960-61 in the individual capacity had been set aside by the Appellate Assistant Commissioner. The eventual conclusion of the Tribunal was as follows: " We have given our careful consideration to the contentions of the learned representatives of the parties and have gone through the records and, in our opinion, the order of the Commissioner of Income-tax under section 263 cannot be legally sustained. We have already reproduced the relevant portion of the order under section 183(b) dated June 4, 1979, passed by the Income-tax Officer and find that all the objections which were taken by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal. As the summary of the order of the Tribunal given above will show, the Tribunal has elaborately examined every order passed in this case and has come to the conclusion that the order is not prejudicial to the Revenue or erroneous. The requirements of section 263 of the Act are very clear. The Commissioner has power to call for and examine the record of any proceedings under the Act and if it is erroneous in so far as it is prejudicial to the interests of the Revenue, he may set it aside. In this particular case, the only question for decision was whether there was a partnership between Shri W. L. Kohli and his son. This is question which can only be answered in relation to the facts of the case. There is a partnership deed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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