Law: Income Tax Act, 1922

Section: 26

Income-tax Act (XI of 1922)---S. 26-A read with Sales Tax Act (III of 1951), Ss. 4 & 12 and Punjab Stamp Rules, 193 4, rr. 25, 26, 27 & 28-Registration of firm­ Essential requirements of genuineness of partnership firm--Business of partnership can be conducted by all or any one of partners-Partner­ ship formed by Stamp Vendors holding individual licences--Held, genuinely constituted and entitled to registration under S. 26-A, income-tax Act. Ismail v. Shorat Bano P L D 1960 Kar. 842; Abdullah Khan arid others v. Ahmad Din P L D 1964 S C 106; Dull Chand v. Commissioner of Income-tax, Nagpur P L D 1956 S C (Ind.) 273 ; Civil Reference No. 65 of 1967 ; Oudh Cocogem & Provision Stores v. Commissioner of Income-tax 1974 P T D 247; Commissioner of Income-tax v. Parkash Ram Gupta 1972 P T D 54; Warasat Hussain v. Commissioner of Income-tax, Bihar 1977 P T D 380; Commissioner of Income-tax v. K. C. S. Reddy 38 I T R 56; Commissioner of Income-tax v. Khushi Ram (1962) 3 Taxation (Ind). 114; Civil Reference No. 186/187 of 1967 and Commissioner of Income-tax v. Mauladad Muhammad Saeed P L D 1965-5 C 316 ref. ORDER MIAN ABDUL KHALIQ (MEMBER).---By this further appeal pertaining to assessment year 1976-77, the assessee has assailed the order of the learned A. A. C. of Income-tax B-Range, Gujranwala. The appeal impugns the order passed under section 26-A of the repealed Income-tax Act, 1922 (hereinafter referred to as the Act). 2. The brief facts of the case are that on 1-7-1975 a partnership was constituted amongst 10 persons. Individual investment of each partner was at Rs. 7,500, with 1/10 share in the Profit & Loss. Nature of the business of the firm was stated to be "sale of judicial and non judicial stamps etc." Out of the partners, five persons namely a, b, c, d and e, held individual Stamp Vendor's Licences issued by the Collector, Gujranwala, under the Punjab Stamp Rules, 1934. The remaining five persons were joined for working as well as for raising funds which were required due to enhancement of limit of stamp vending from Rs. 100 to Rs. 1,000. The firm was registered with the Registrar of Firms on 26-6-1976 under section 58 of the Partnership Act.…

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