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Section 185 of the Income-tax Act, 1961 - Firm - Position prior to 1-4-1993 - Whether a firm could be treated as non-genuine on basis of statement made by a lady-partner that she did not know about partnership deed and she was not aware of terms and conditions thereof and even had not signed partnership deed at time of formation of partnership firm - Held, yes FACTS The assessee-firm was formed by means of partnership deed. It had moved an application for registration of the firm. The ITO examined one of the lady-partners of the firm who, inter alia, denied any knowledge of the partnership deed and terms and conditions thereof. The ITO was of the view that the firm was not a genuine one and rejected application for registration. On appeal, the AAC confirmed the view taken by the ITO. On second appeal, the Tribunal upheld the orders of the AAC and the ITO. On reference : HELD Whether the firm is genuine or not is based on findings of fact. All the three authorities, i.e., the ITO, the AAC and the Tribunal, had found that the firm was not genuine one. After considering the concurrent finding, there was limited scope to interfere with such concurrent finding of fact. The reply given by the lady-partner showed that she did not know about the partnership deed, was not aware of the terms and conditions thereof, had not signed the partnership deed at the time of formation of partnership firm, and was not aware of receipt of any interest on the deposited amount with the firm, and that the partnership deed was not even read out to her. Thus, she was not aware of the contents of the partnership deed and when there was a concurrent finding of fact that the firm was not genuine one, then there was no justification to interfere with such finding of fact. Therefore, the Tribunal was correct in holding that the firm was not genuine. CASES REFERRED TO Mahavir Industrial Works v. CIT [1984] 149 ITR 539/[1985] 21 Taxman 35 (MP) and Ganga Cut Piece Centre v. CIT [1982] 137 ITR 274/9 Taxman 259 (MP). A.K. Sharma for the Applicant. J.K. Singhi and Anuroop Singhi for the Respondent. ORDER On the application filed under section 256(1) of the Income-tax Act, 1961, the Tribunal has…

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