TMI Blog1997 (5) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... -------------------------------------------------------------------------------- M/s. Arvind Panalal 11-12-1990 In cash Investment Pvt. Ltd. Rs. 15,000 -do- 17-12-1990 In cash Rs. 30,000 -do- 8-12-1990 In cash Rs. 1,72,000 -------------------------- Total Rs. 2,17,000 ------------------------- -------------------------------------------------------------------------------------------------------------------------------------------------- According to the Assessing Officer, this was in contravention of the provisions of section 269SS of the IT Act and after giving the assessee an opportunity of being heard, he came to a conclusion that the assessee was liable to be penalised under section 271D of the Act. Acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uj.), Vir Sales Corpn. v. Asstt. CIT [1994] 121 CTR (Ahd.) 46 and Mohamad Ali v. Karji Koudho Rayaguru AIR 1945 Pat. 286. The DR invited our attention to the provisions of sections 188 189 of the I.T. Act to submit that a specific mention has been made in the Act where the firm and the partners are treated as separate entities. As far as section 269SS is concerned, the firm and partners are separate entities for the purposes of income-tax and for the purposes of application of the provisions of the Income-tax Act. He invited our attention to the decisions reported in CIT v. A. W. Figgies Co. [1953] 24 ITR 405 (SC), (sic) 200 ITR 505, Chief Controlling Revenue Authority v. Manohar Lal Dudeja [1991] 189 ITR 186 (All.) (FB) Narayandas Ke ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me character of the income of the firm. The Hon'ble Supreme Court, therefore, relying on the commentary of Lindley on Partnership held that the firm as such has no legal recognition. The law, ignoring the firm, looks to the partners composing it; any change amongst them destroys the identity of the firm; what is called the property of the firm is their property, and what are called the debts and liabilities of the firm are their debts and their liabilities. A partner may be a debtor or a creditor of his co-partners, but he cannot be either debtor or creditor of the firm of which he is himself a member, nor can he be employed by his firm, for a man cannot be his own employer. Therefore, it is obvious that in this case there cannot be a relat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has for some specific purposes relaxed its general rigid notions and extended a limited personality to a firm. Therefore, the Hon'ble Madras High Court has only stated that the firm and the partners are distinct assessable entities, but it has nowhere said that the firm is not a separate legal entity. The Hon'ble Gujarat High Court in the case of Madhukant M. Mehta had also held that a firm has no distinct legal entity apart from the partners except that in Income-tax Act a firm is a unit of assessment and has certain attributes simulative of a personality. The Hon'ble Supreme Court in the case of CIT v. Ramniklal Kothari [1969] 74 ITR 57 held, " ........ although for purposes of income-tax a firm has certain attributes simulative of perso ..... X X X X Extracts X X X X X X X X Extracts X X X X
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