TMI Blog1985 (6) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... s registered was in existence and called upon the assessee to make its representations in respect thereof on January 20, 1970. At the request of the assessee, the proceedings were adjourned till February 11, 1970, on which date the assessee asked the Income-tax Officer in writing for information about the material on which he had formed an opinion stating further that on receipt of such information further explanation would be submitted. It was contended that the assessee was genuine firm in existence during the relevant years and registration has been duly granted to the assessee. There was no reason for the Income-tax Officer to change his opinion. The Income-tax Officer without any further reference to the assessee proceeded on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against the said orders to the Appellate Assistant Commissioner, who found that the brother and the father of Dhaniram Gupta had been given authority to operate the bank account of the assessee to avoid difficulties when the partners were absent and held that this was not a valid ground for holding that the assessee was not genuine firm. He also found that during the relevant assessment years, Dhaniram Gupta held no share in the company and there was no basis to hold that Dhaniram Gupta controlled the affairs of the company and the assessee. He held that there was no material before the Income-tax Officer to come to the conclusion that the assessee was not a genuine firm. He allowed the appeals and cancelled the orders of the Income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the partners, was in India during the relevant assessment years and that Dhaniram Gupta did not control the company exclusively during the said years. The Tribunal held that no adverse inference should be drawn from the fact that the balance-sheet of the assessee had not been prepared even after the audit of the company was completed and that the profits of the assessee were not apportioned between the partners. The Tribunal agreed with the Appellate Assistant Commissioner that there was no material on record for the Income-tax Officer to come to the conclusion that there was no genuine firm in existence during the relevant years and rejected the appeals. On an application of the Revenue under section 256(1) of the Act, the follow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome-tax Officer can reject the same if he comes to the conclusion that the partnership is not genuine or the instrument of partnership does not specify correctly the individual shares of the partners. But once he comes to the conclusion that the partnership is genuine and a valid one, he cannot refuse registration on the ground that one of the partners is a benamidar of another. If the partnership is genuine and legal, the share given to the benamidar will be the correct specification of his individual share in the partnership. The beneficial interest in the income pertaining to the share of the said benamidar may have relevance to the matter of assessment, but none in regard to the question of registration. " (b) CIT v. Hassanally Sons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en held both by the Appellate Assistant Commissioner and the Tribunal that the assessee was not given adequate opportunity to make representation to justify the continuation of its registration. On this ground alone the assessee is entitled to succeed. On merits, it appears that the main contention of the Revenue before the Tribunal was that the firm had authorised the operation of its bank account by the relations of one of the partners and, as such, the partnership deed was not acted upon. It does not appear from the deed that the partners were precluded from authorising their agents to operate the firm's bank account on their behalf. Even otherwise, in view of the decision of the Supreme Court in K. D. Kamath Co. [1971] 82 ITR 680, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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