Law:

Section:

Section 60 of the Income-tax Act, 1961 - Transfer of income when no transfer of assets is involved-M transferred his contract dated 7-1-1969 for constructing stadium to firm constituted by himself and two others under partnership deed dated 15-4-1969-M was to collect bills for and on firm's behalf and payments received by him were treated as firm's funds-Contracting authority declined M's request for said transfer of contract in firm's name with retrospective effect from 1-4-1969 - Firm, however, granted registration by ITO under section 185-Whether impugned transfer would attract provisions of section 60 and income earned from construction work relating to stadium assessable wholly in M's hands-Held, on facts, no Section 61 of the Income-tax Act, 1961-Revocable transfer of assets-Whether impugned transfer of construction contract for stadium by m to firm would be hit by section 61 and resultant income assessable wholly in m's hand-Held, on facts, no Section 4 of the Income-tax Act, 1961-Income - Diversion by overriding title-Whether impugned transfer of construction contract for stadium by m to firm and resultant income amounted to diversion of m 's income by overriding title to two other partners-Held, on facts, no since income was firm's income Section 185 of the Income-tax Act, 1961-Firm-Registration-Genuineness of-Whether section 185 was merely a procedural provision-held, no-Whether section 185 would preclude applicability of sections 60 and 61 for purpose of making an assessment under section 143(3)-Held, yes Facts The assessee, M, secured from the Nagpur Municipal Corporation a contract dated 7-1-1969 for constructing a stadium. On 15-4-1969, he formed a partnership with two other partners. The relevant partnership deed stipulated, inter alia, that the firm would execute the said contract work and that M would collect the bills for and on firm's behalf and payments received by him would always be treated as the firm's funds. Another partnership deed was executed on 26-11-1969 which provided, amongst others, that the firm RLM would carry on the business of constructing buildings, bridges, roads and all other allied civil constructions. The Corporation…

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