9911796707
TMI Blog1959 (5) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... facts of the case are as follows: One Bhuban Mohan Shaw, who died in 1908, had three sons, Uma Charan Shaw, Aboy Charan Shaw and Panchukali Shaw. On his death, these three sons were alive, and there was also his widow, Mst. Surabala Dassi. Bhuban Mohan Shaw held an excise licence in his name for the retail sale of foreign liquor at a shop situated at No. 1, Dharamtala Street in Calcutta. After his death, the brothers formed a Hindu joint family of which Uma Charan was the karta. They were governed by the Dayabhaga law. The family continued the said business of sale of foreign liquor and the excise licences were taken in the names of Uma Charan and Panchukali. During the years that followed the business of the family was extended and other shops were opened. In addition to the retail shop of foreign liquor at Dharamtala Street, the family had an excise shop at Nos. 201 and 202, Chandney Chawk Street, Calcutta, also for retail sale of foreign liquor, an excise shop at No. 40, Moti Sil Street, Calcutta, for the wholesale of foreign liquor and an oilman stores (known as Shaw Brothers Stores) at No. 12/13, Bertram Street, Calcutta. The licences of these shops were held in different name ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reet, Calcutta. The income of that business was, thence, assessed in the hands of the said company. Uma Charan died on January 25, 1947, and his son Radha Raman Shaw was taken into the partnership with a share equal to that of his father. On April 10, 1947, a fresh deed of partnership was entered into by Panchukali, Shashadhar and Radha Raman in respect of the remaining shops, namely, (i) Messrs. Uma Charan Shaw, No. 40, Moti Sil Street, Calcutta, (ii) Messrs. Panchukali Shaw and Radha Raman Shaw, No. 1, Dharamtala Street, Calcutta, and (iii) Messrs. S. B. Dassi and A. C. Shaw at No. 201/202, Chandney Chawk Street, Calcutta. The said deed of partnership relating to these three shops was the basis of a fresh application under section 25A of the Act, out of which these two appeals have ultimately arisen. At first, a return was filed as a Hindu undivided family by the appellant. The return was corrected by filing another but again as a Hindu undivided family. A third return was then filed as a firm in the name of Uma Charan Shaw and Brothers, a firm of partners. Simultaneously, applications were made under sections 25A and 26A of the Act. The Income-tax Officer II(2), Calc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that even when the partners constituted a Hindu undivided family, they had a bank account in the name of one of the partners and the same is continued even after the partnership was constituted. It was also admitted that the outside world is not aware of the fact that the excise business is being carried on in partnership. A partnership is an artificial legal entity. If the partnership among the three partners is one which could not be disclosed to the very authorities under whom licences are obtained for the excise shops and the fact that the partnership having come into existence is not made known to others, it will not be open to the assessee to claim registration under section 26A. All this establishes that no genuine partnership had come into existence. On the materials placed before us, we do not find any cogent reason to interfere with the order passed by the income-tax authorities. The assessee has not established the division of the capital of the business and that the profits are being divided among the partners from the business books. The alleged Bali Khata is not a valid and recognised account book. The formation of the partnership itself is in violation of the Exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the accounts as hitherto by the partners, the outside world was not informed that the Hindu undivided family had disrupted. The decisions rendered in the case are said to involve a finding of fact, and it is contended for the Department that there was material on which the finding could be rested. Though the Tribunal stated that it had not proceeded on the ground that the partnership was illegal being against the Bengal Excise Act, 1911, the argument was referred to as supporting the conclusion that the firm was not genuine. Section 42(1)(a) of the Bengal Excise Act reads: " 42.(1) Subject to such restrictions as the State Government may prescribe the authority who granted any licence, permit or pass under this Act may cancel or suspend it .... (a) if it is transferred or sub-let by the holder thereof without the permission of the said authority. " There was no evidence that the excise licences were transferred or sub-let. The three shops, it appears, were managed separately and their accounts were kept distinct. There was thus nothing which militated against the partnership and it cannot be said that this affected the genuineness of the agreement. Extracts from the Bali Khat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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