Law: Income Tax Act, 1961

Section: 185,2

Income-tax----Firm---Registration---Condition precedent---Valid partnership---Essentials of valid partnership---Business must be carried on---Partnership formed with object of purchasing lottery tickets and sharing prize money---No business was carried on---Firm was not entitled to registration---Indian Income Tax Act, 1961, S. 185. While according registration, the Income-tax Officer should inquire into the genuineness of the firm and its constitution, as specified in the instrument of partnership, pursuant to the salient provisions adumbrated under subsection (1) of section 185 of the Income Tax Act, 1961. If he is satisfied that there is or was during the previous year in existence a genuine firm with the constitution so specified, he shall pass an order in writing registering the firm for the assessment year. If he is not so satisfied, he shall pass an order in writing refusing to register the firm. The following important elements must be there in order to establish a partnership: (i) There must be an agreement entered into by all the parties concerned; (ii) The agreement must be to share profits of business; and (iii) The business must be carried on by all or any one of the persons concerned acting for all. The expression "business" has been defined in section 2(13) of the Income Tax Act, 1961 as including any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture. Whatever else may or may not be regarded as falling within the meaning of those words, gambling cannot certainly be taken as one of them: Held, accordingly, that the assessee-firm which had been constituted with the object of purchasing lottery tickets and sharing the prize money was not entitled to registration. The transaction of the assessee-firm could not be taken as activities relatable to trade, commerce, intercourse or business. State of Bombay v. R.M.D. Chamarbaugwala AIR, 1957 SC 699 applied. Douglas v. Commonwealth Kentucky (1897) 168 US 488; Phalen v. Commonwealth of Virginia (1850) 49 US 163 and Ramloll v. Soojunmull (1847) 4 Moo. Ind. App. 339 (PC) ref. THIS JUDGMENT DELIVERED BY: JANARTHANAM, J.---The assessee "S. Mariappan", it…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492