SETH BROTHERS Vs. COMMISSIONER OF INCOME TAX
LAWS(BOM)-1954-10-1
HIGH COURT OF BOMBAY
Decided on October 19,1954

SETH BROTHERS Appellant
VERSUS
COMMISSIONER OF INCOME TAX Respondents


Referred Judgements :-

COMMISSIONER OF INCOME TAX V. LAXMI NARAYAN [REFERRED TO]
V M N RADHA AMMAL VS. COMMISSIONER OF INCOME TAX [REFERRED TO]


JUDGEMENT

- (1.)This is a reference under section 66(1), Income-tax Act to decide the following question :
"Whether the firm constituted under the partnership deed dated 20-1-1949 was a firm which could be registered under the provisions of Sec. 26A. Income-tax Act ?"

(2.)Two brothers, Mataprasad and Dwarka-Prasad, were carrying on business as a Hindu undivided family and were assessed as such for assessment year 1947-48 for the previous year ending Daserah of 1946. On 4-10-1946 there was a partition between these two brothers. On 10-10-1946 they formed a partnership in the wine business carried on in the name and style "Cursetji and Co." and in the cloth business carried on in the name and style 'Seth Brothers'. By an order under section 25A of the Act passed on 8-9-1949 the Income-tax Officer recognised the partition of the family properties with effect from 4-10-1946. On 20-6-1948 Mataprasad died leaving behind a widow and three minor sons. On 20-1-1949 Dwarkaprasad and Sethani Saraswatibai widow of Mataprasad executed a partnership deed. It was there stated that the firm having been dissolved by the death of Mataprasad on 20-6-1948, the parties agreed to run the business as before with effect from the date of the death of Mata Prasad. The shares of the two executants as expressed in the instrument of partnership were equal. The profits and losses were to be shared in the same proportion. It was also agreed that each partner was entitled to carry on business acting for all and had been actually so acting.
(3.)On 20-1-1949 an application was made under section 26A of the Act to claim registration on the basis of the partnership agreement dated 10-10-1946. The application was signed by Dwarkaprasad and Sethani Saraswatibai as heir of Mataprasad. As the Income-tax Officer would not accept registration of the firm on this application, a second application was made by Dwarkaprasad and Saraswatibai, supported by the instrument of partnership dated 20-1-1949, and they pressed for a decision on the second application. At the hearing it was admitted that Sethani Saraswatibai had entered into partnership with a view to protect the interests of her minor sons. This application was rejected by the income-tax authorities.


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