Law: Income Tax Ordinance, 1979

Section: 68

(a) Income-tax Ordinance (XXXI of 1979)---S. 68--Registration of firm--Firm duly constitutes under an instrument of partnership fulfilling all the requirements required by S. 68 and the firm having been constituted in accordance with the instrument of partnership cannot be refused registration merely on the ground that object of the firm was to avoid or to reduce the incidence of tax--Avoidance or reducing of tax liability by arranging commercial affairs by assessee not prohibited. C.I.T. v. Hussain Corporation, Karachi 1983 P T D 289; Commissioner of Income-tax v. Sivkasi Match Exporting Company (1964) 53-I T R 204; C I T v. A. Raman & Company (1967) 67-I T R 11 and Aruna Group of Estates v. State of Madras (1965) 55- I T R 642 ref . (b) Income-tax Ordinance (XXXI of 1979)-- ---S. 68--Registration of firm--Genuineness of firm--Powers of I.T.O. as to see whether a genuine firm has been constituted are restricted under S. 68 only to examine whether the firm was constituted in accordance with the instrument of partnership. ORDER This appeal has been filed by the assessee against the refusal to grant registration under section 68 of the Income Tax Ordinance. 2. Brief facts of the case under which this appeal has arisen are that originally this firm had been registered by the Income-tax Officer for the assessment year 1978-79 consisting of the following partners: (1) Abdul Aziz 10% (2) Mist. Nusrat Sank 20% (3) Mst. Yasmeen 15% (4) Mst. Jajma 10% (5) Babar Rehman (Minor) 15% (6) Farhat Naheed (Minor) 10% (7) Aamar Sajjad (Minor) 10% (8) Abdul Hadi (Minor) 10% The firm continued and had been treated as such till the assessment year 1983-84. In the assessment year under consideration the firm was re-constituted in which the major partners remained the same. The minors who had been admitted to the benefits of partnership namely, Babar Rehman, Aamar Sajjad and Abdul Hadi were eliminated and a new minor namely Khalid was admitted to the benefits of the partnership. It may be noted that the assessee-firm has taken on lease a commercial building known as Plaza Chamber. The lease money is Rs.88,200. From the facts of the case it appears that the assessee sub-leases the…

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