MUNAVALLI I P Vs. COMMISSIONER OF INCOME TAX
HIGH COURT OF KARNATAKA
COMMISSIONER OF INCOME-TAX, MYSORE
Referred Judgements :-
LACHMAN DAS V. COMMISSIONER OF INCOME-TAX
Click here to view full judgement.
Somnath Iyer, J. -
(1.)THIS reference at the instance of the assessee is made by the Income-tax Appellate Tribunal, under section 256(1) of the Income-tax Act, 1961.
(2.)THE father, I. P. Munavalli, and the son, C. I. Munavalli, are the assessees and the assessment year is 1963-64. THE Hindu undivided family of which I. P. Munavalli was the karta, was carrying on a business in foodgrains and pulses and no November 9, 1961, according to the statement of the case submitted to us, the father and the son entered to the statement of the case submitted to us, the father and the son entered into an agreement of partnership under which the son become a working partner and the other partner was the joint family of which the father was the karta. THE profits and losses had to be share equally by the two partners.
When the assessees made an application for registration of the firm under section 185 of the Act, the Income-tax Officer refused registration on the ground that there was no partition between the members of the family, and there was no genuine partnership which came into being between the members of the family.
The Appellate Assistant Commissioner was of a different view. In his opinion a partnership between the Hindu joint family represented by the karta and a member of the coparcenary who became a working partner was a goods partnership and that there was no legal impediment to such a partnership coming into being. He was of the further opinion that the partnership was a genuine partnership. So he granted the registration sought by the assessees.
(3.)BUT in the further appeal preferred by the department the registration granted by the Appellate Assistant Commissioner was vacated and the refusal of such registration by the Income-tax Officer was restored.
The question of law referred to this court reads :
"Whether, on the facts and in the circumstances of the case, the agreement dated November 9, 1961, between Shri I. P. Munavalli and C. I. Munavalli brought into existence a valid partnership entitled to registrations under section 185 of the Income-tax Act, 1961 ?"
Copyright © Regent Computronics Pvt.Ltd.