Law: Income Tax Act, 1922

Section: 26,26A

[Indian Income Tax Act, 1922 (XI of 1922)]........Section 26A-Firm- Registration-Partnership consisting of three individuals and a firm- Partnership deed signed by partners affirm and all the three individuals- Names and specific shares of partners of firm and three individuals clearly specified-Firm whether genuine and entitled to registration -Held yes. Where a partnership is constituted of a firm and an individual the partnership deed, instead of setting down the names of the individual and the members of that firm, may compendiously use the name of the firm by making it clear that what was intended was a partnership constituted between the individual and the constituent members of the firm : and that such is the intention can be made clear if the partnership deed itself is signed not only in the name of the firm but by all the constituent members of that firm. A firm by the name N (assessee-firm) was constituted with effect from April I, 1957, consisting of four partners, namely, P.M.L. and firm, JV which consisted of two partners, I and V. Partners P and JV had one third share and the other partners had one-sixth share each therein. This deed of partnership was executed on April 5, 1957. The partnership deed was signed by all the partners P, M, L and by I and on behalf of the firm, JV. On April 25, 1957, another deed of partnership was drawn up constituting the firm of JV with effect from April 1, 1957, consisting of two partners, J and V, with equal shares. For the assessment years 1958-59 and 1959-60, applications were made to the Income Tax Officer for registration of the assessee-firm and these applications were accompanied by both the deeds of partnership respectively executed on April 5, 1957, and April 25, 1957. A supplementary deed of partnership was also drawn up to the effect that the deed dated April 5, 1957, was a deed of partnership between the individual members of the firm, their shares being specifically mentioned therein. The Income Tax Officer, however, took the view that there was no firm in existence as per the partnership deed executed on April 5, 1957, and declined to register the firm. On appeal by the assessee, the Appellate…

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