COMMISSIONER OF INCOME TAX BOMBAY Vs. DWARKADAS KHETAN AND CO
LAWS(SC)-1960-12-36
SUPREME COURT OF INDIA (FROM: BOMBAY)
Decided on December 01,1960

COMMISSIONER OF INCOME TAX,BOMBAY Appellant
VERSUS
DWARKADAS KHETAN AND COMPANY Respondents





Cited Judgements :-

HIRALAL JAGANNATH PRASAD VS. COMMISSIONER OF INCOME TAX [LAWS(ALL)-1966-11-13] [REFERRED TO]
COMMISSIONER OF INCOME TAX VS. MATHURA PRASAD ANNOOLAL [LAWS(ALL)-1978-1-63] [REFERRED TO]
ADDITIONAL COMMISSIONER OF INCOME TAX VS. UTTAM KUMAR PRAMOD KUMAR [LAWS(ALL)-1978-5-87] [REFERRED TO]
COMMISSIONER OF INCOME TAX VS. BADRI NATH GANGA RAM [LAWS(ALL)-2004-11-15] [REFERRED TO]
ABDUL AZIZ AND CO VS. COMMISSIONER OF INCOME TAX [LAWS(J&K)-1973-7-1] [REFERRED TO]
MALLIKA JEHAN BEGUM VS. TARACHAND [LAWS(APH)-1963-12-2] [REFERRED TO]
AKARAPU RAJACHANNA VISWESWARA RAO VS. COMMISSIONER OF INCOME TAX ANDHRA PRADESH HYDERABAD [LAWS(APH)-1964-2-9] [REFERRED TO]
ADDEPALLY NAGESWARA RAO VS. COMMISSIONER OF INCOME TAX [LAWS(APH)-1969-9-12] [REFERRED TO]
COMMISSIONER OF INCOME TAX VS. RAMAKRISHNA MOTOR TRANSPORT [LAWS(APH)-1982-12-62] [REFERRED TO]
COMMISSIONER OF INCOME TAX VS. SULEMAN KHAN AND MAHABOOB KHAN TOBACCO EXPORTERS [LAWS(APH)-2002-6-101] [REFERRED TO]
COMMISSIONER OF INCOME TAX VS. KHETAN AND CO [LAWS(CAL)-1961-5-19] [REFERRED TO]
COMMISSIONER OF INCOME TAX VS. RUPCHAND ROUTHMALL [LAWS(CAL)-1962-2-27] [REFERRED TO]
KARNIDAN RAWATMULL VS. COMMISSIONER OF INCOME TAX [LAWS(CAL)-1962-3-26] [REFERRED TO]
JEEWANRAM GANGARAM VS. COMMISSIONER OF INCOME TAX [LAWS(CAL)-1967-1-9] [REFERRED TO]
NATIONAL TRADING COMPANY VS. COMMISSIONER OF INCOME TAX [LAWS(CAL)-1968-4-18] [REFERRED TO]
P SYED SAHEB AND SONS VS. STATE OF MYSORE [LAWS(KAR)-1971-6-26] [REFERRED TO]
NARAYAN PRASAD VIJAIVARGIYA VS. COMMISSIONER OF INCOME TAX [LAWS(CAL)-1975-1-26] [REFERRED TO]
RAMESHWARLAL LOHARIWALLA VS. COMMISSIONER OF INCOME TAX [LAWS(CAL)-1978-2-9] [REFERRED TO]
COMMISSIONER OF INCOME TAX VS. R S SINGH AND CO [LAWS(CAL)-1978-11-15] [REFERRED TO]
PALU C T AND SONS VS. COMMISSIONER OF INCOME TAX [LAWS(KER)-1968-10-23] [REFERRED TO]
COMMISSIONER OF INCOME TAX VS. PHAIR LABORATORIES [LAWS(KER)-1984-7-6] [REFERRED TO]
K VIMALA DEVI VS. KASTHURI [LAWS(MAD)-1993-4-8] [REFERRED TO]
COMMISSIONER OF INCOME TAX VS. CHANDRIKA ENTERPRISES [LAWS(KER)-1991-10-41] [REFERRED TO]
PAUL MATHEW AND COMPANY VS. COMMISSIONER OF INCOME TAX [LAWS(KER)-2006-6-51] [REFERRED TO]
COMMISSIONER OF INCOME-TAX PUNJAB VS. BALKISHAN DAS HANUMAN DASS [LAWS(P&H)-1962-11-17] [REFERRED TO]
DHARAM VIR VS. JAGAN NATH [LAWS(P&H)-1966-8-6] [REFERRED TO]
HOSHIARPUR ELECTRIC SUPPLY CO VS. COMMISSIONER OF INCOME-TAX [LAWS(P&H)-1970-2-16] [REFERRED TO]
ALANKAR BHAWAN VS. COMMISSIONER OF INCOME TAX [LAWS(PAT)-1968-12-21] [REFERRED TO]
COMMISSIONER OF INCOME TAX MYSORE BANGALORE IN BOTH APPEALS VS. SHALL MOHANDAS SADHURAM MYSORE IN BOTH THE APPEALS [LAWS(SC)-1965-4-3] [REFERRED]
KYLASA SARABHAIAH VS. COMMISSIONER OF INCOME TAX [LAWS(APH)-1961-8-14] [REFERRED TO]
CHIMAN LAL UMAJI AND SONS VS. COMMISSIONER OF INCOME TAX M P [LAWS(MPH)-1966-3-4] [REFERRED TO]
COMMISSIONER OF INCOME TAX VS. K C THOMAS AND CO [LAWS(KER)-1983-2-23] [REFERRED TO]
COMMR OF INCOMETAX VS. P M SYED MOHAMMED KANNU AND CO [LAWS(KER)-1984-6-33] [REFERRED TO]
COMMISSIONER OF INCOME TAX VS. SYED MOHAMMAD KANNU P M AND CO [LAWS(KER)-1984-6-27] [REFERRED TO]
COMMISSIONER OF WEALTH TAX VS. FAZALBHOY Y A [LAWS(BOM)-1980-3-4] [REFERRED TO]
JAGADHRI ELECTRIC SUPPLY AND INDUSTRIAL CO VS. COMMISSIONER OF INCOME-TAX [LAWS(P&H)-1986-7-1] [REFERRED TO]
KRISHNA AGRICO ELECTRICAL INDUSTRIES VS. COMMISSIONER OF INCOME TAX [LAWS(PAT)-1986-1-15] [REFERRED TO]
K. ABDUL AZEEZ SAHIB AND SONS, FOUR HORSE BEEDI MANUFACTURERS AND ORS. VS. THE UNION OF INDIA (UOI) REPRESENTED BY THE SECRETARY, MINISTRY OF LAW AFFAIRS AND ORS. [LAWS(MAD)-1972-9-56] [REFERRED]
INCOME-TAX OFFICER VS. GWALIOR TEXTILES [LAWS(ALL)-1984-5-64] [REFERRED]
COMMISSIONER OF INCOME-TAX VS. KEDARMALL KESHARDEO [LAWS(GAU)-1968-2-17] [REFERRED]


JUDGEMENT

Hidayatullah, J. - (1.)The Commissioner of Income-tax has filed this appeal, with special leave, against the judgment and order of the High Court of Bombay, by which the High Court answered two questions referred to it in favour of the respondents, M/s. Dwarkadas Khetan and Co., Bombay. These questions were:
"(1) Whether the instrument of partnership dated 27-3-1946 created a deed of partnership

(2) If the answer to question No. 1 is in the affirmative, whether the fact that on 1-1-1946 there was no firm in existence would be fatal to the application for registration of the firm under S. 26A of the Indian Income-tax Act or whether the firm could be registered with effect from 26-3-1946 if it is held that the firm was genuine -

(2.)Prior to 1st January 1945, there was a firm called Dwarkadas Khetan and Co. on that date, the firm ceased to exist, because the other partners had previously withdrawn and it came to be the sole proprietary concern of Dwarkadas Khetan. On 12th February 1946. Dwarkadas Khetan obtained the selling agency of Seksaria Cotton Mills, Ltd. On 27th March 1946, he entered into a partnership with three others by an instrument of partnership executed that day. Those three others were Viswanath Purumul, Govindram Khetan and Kantilal Kasherdeo. Dwarkadas Kehtan's share in the partnership was 7 annas in the rupee, while the remaining 9 annas in the rupee, while the remaining 9 annas' share was divided equally among the three others. Though Kantilal Kasherdeo was a minor, he was admitted as a full partner and not merely to the benefits of the partnership, as required by S. 30 of the Indian Partnership Act. To the instrument of partnership, Kantilal Kasherdeo was also a signatory, though immediately after his signature there was the signature of one Kasherdeo Rungta, the natural guardian of the minor. In the instrument, Kantilal Kasherdeo was described as a full partner entitled not only to a share in the profits but also liable to bear all the losses including loss of capital. It was also provided that all the four partners were to attend to the business, and if consent was needed, all the partners including the minor had to give their consent in writing. The minor was also entitled to manage the affairs of the firm, including inspection of the account books and was given the right to vote, if a decision on votes had to be taken. In short, no distinction was made between the adult partners and the minor, and to all intents and purposes, the minor was a full partner, even though under the partnership law he could only be admitted to the benefits of the partnership and not as a partner.
(3.)The deed of partnership was produced before the Registrar of Firms showing the names of the four partners. The Registrar of Firms granted a registration certificate, and in the certificate Kantilal Kasherdeo was shown as a full partner and not as one entitled merely to the benefits of the partnership. Banks were also informed about the four partners, and it does not appear that to them intimation was sent that one of the named partners was a minor. Though the partnership came into existence on 27th March 1946, the firm was stated to have started retrospectively from 1st January 1946. It may be pointed out that the firm has the Calendar year as its account year, and the matter before us refers to the account year, 1946 corresponding to the assessment year, 1947-48.
;


Click here to view full judgement.
Copyright © Regent Computronics Pvt.Ltd.