MAHADEVIA AND MEHTA Vs. ASSTT CIT

JUDGEMENT

(1.) These appeals filed by the assessee are directed against consolidated order dated 9-10-1995, passed by the learned Commissioner (Appeals), Calcutta V, in the matter of order under section 186 read with section 184(7) of the Income Tax Act, for the assessment years 1990-91, 1991-92 and 1992-93. The appellant has raised a number of grounds of appeal but the basic arising for our adjudication is whether on the facts of this case, the learned Commissioner (Appeals) was justified in upholding refusal of registration to the appellant-firm.

(2.) M/s. Mahadevia and Mehta, the assessee before us, is a partnership concern and it has undergone some changes in constitution of the firm from time to time. One of the clauses of the partnership deed dated 10-11-1977, namely clause No. 17, provided as under :

(3.) Shri Amritlal Vandravan Sheth, one of the partners who was signatory to the aforesaid partnership deed dated 10-11-1977, passed away on 27-6-1981. In terms of the clause 17 of the partnership deed, his legal heirs namely Smt. Chanda Amritlal, his widow, and Smt. Vanlila Sheth, his daughter, were admitted to the partnership and deceaseds share of 16 per cent was equally divided between these two persons. These changes were carried out through, in substance, a variation deed dated 29-6-1981. A little later, however, another change was carried out because upon execution of the will of the deceased, his entire estate was in the hands of his widow i.e. Mrs. Amritlal who thus acquired full right in respect of share and interest of late Shri Sheth in the firm. Accordingly, his daughter Smt. Vanlila Sheth had to relinquish her share in the firm in favour of Mrs. Amritlal who, thus, became a 16 per cent shareholder in the firm. Smt. Chanda Amritlal also passed away on 3-12-1984. In terms of clause 17 of the partnership deed, referred to above, partnership business was to continue and deceaseds legal heirs were to become the partners.