Law:

Section:

Section 4 of the income-tax act, 1961-Association of persons-Assessability as-Sole proprietor of business retired and gave business in gift to his three sons K, B and T -Partnership deed was executed by sons and firm was granted registration-Subsequently, its registration was cancelled on basis of finding arrived at in view of T's matriculation certificate that t was a minor on the date of execution of partnership deed-But it was found that the business was carried on as a joint venture and that t on becoming major did not renounce his share of business or objected to same being carried on jointly in his name-He had also put his signature on documents of business for purposes of income-tax-ITO, therefore, reopened assessment of firm to assess its income in hands of partners in status of AOP-Whether no valid partnership existed and there was sufficient material to justify assessment of partners in status of AOP-Held, on facts, yes. Facts One S gave his proprietary business to his three sons to be carried on in partnership. The three sons K, B and T, executed a partnership deed on 24-5-1948 to carry on the said business. The partnership claimed and was granted registration for the relevant assessment years and was assessed as a registered partnership for the years 1956 to 1959. In the assessment proceedings for the assessment year 1959-60, it was found that T was born in 1940 and was minor on 24-5-1948. A notice was issued to the partnership to show cause why its registration for the relevant assessment years should not be cancelled under rule 6B on the ground that the partnership was invalid. The partnership contended that T was not a minor on the said date and produced the following in support of its claim : (i) an affidavit of father of T, dated 25-10-1960, stating that T was a major on the relevant date, (ii) two horoscopes, (in) a certificate of birth of T issued by the concerned municipality, and (iv) a policy of insurance taken out on the life of T. However, since T's matriculation certificate recorded his date of birth as 2-2-1940, the ITO accepted the age of T as appearing in the matriculation records as correct and, accordingly, cancelled the…

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