AIR 1964 MADHYA PRADESH 224 ::(1963) 50 ITR 628 ::1964 MPLJ 326 ::1965 JabLJ 550 ::ILR (1964) MP 466

Madhya Pradesh High Court

Hon'ble Judge(s): P. V. Dixit , C.J. AND K. L. Pandey , J

(A) Income-Tax Act (11 of 1922) , S.26A— Joint Hindu family - Disruption and partnership - Application for registration of firm rejected on ground that partnership deed was not genuine - Circumstances for finding held not valid. After the disruption of a Joint Hindu family the members formed a partnership by a deed. The application for registration of the firm under S. 26-A, was rejected for the reasons that the members continued to live and mess together even after the disruption of the family; that the father had full and exclusive control of the family business; that the accounts in the bank continued to be operated by him even after the commencement of the partnership business; that the stamps for the deed of partnership were purchased before the family disrupted; that the firm was not registered under the Partnership Apt for over a year after its commencement; and that for these reasons the partnership was not genuine : Held, that the reasons advanced by the taxing authorities for holding that the firm was not genuine were not tenable and valid. There is nothing to prevent a joint Hindu family from disrupting and forming a partnership and the members living and messing together even after the disruption of the family and formation of the partnership. Similarly, the retention of control and management of the partnership busi....