| Case ID |
230f55c0-188c-458b-918a-f7faded4d69b |
| Body |
View case body. Login to View |
| Case Number |
I.D. Reference Case No. 6 of 1966 |
| Decision Date |
Dec 04, 1968 |
| Hearing Date |
|
| Decision |
The court determined that the Income-tax Appellate Tribunal was correct in its view that the date of the commencement of business, rather than the date of execution of the partnership deed, should be used to determine the date of the constitution of the firm. The partnership deed was executed on August 25, 1960, but the business was not set to commence until November 1, 1960. The court emphasized that there must be an actual carrying out of business to constitute a firm under partnership law, and that the delay in commencement was legitimate as the partners were preparing to secure foreign agencies. The decision clarified that the establishment of a partnership does not necessarily require immediate commencement of business, but rather the intent and agreement to share profits from future business activities. |
| Summary |
This case revolves around the interpretation of the Income Tax Act, 1922, particularly Section 26A, which governs the registration of firms. The Sindh High Court examined whether the date of the commencement of business or the date of the partnership deed's execution should be considered the date of constitution of the firm. The court ruled that a firm is not constituted until actual business activities are undertaken, aligning with the principles outlined in the Partnership Act. This case is significant in clarifying the legal requirements for firm registration under tax laws and the implications of partnership agreements. As such, it highlights the importance of understanding the nuances of partnership law and tax regulations, which are critical for legal practitioners and businesses. |
| Court |
Sindh High Court
|
| Entities Involved |
Not available
|
| Judges |
QADEERUDDIN AHMAD
|
| Lawyers |
S.A. Nusrat,
Ali Athar
|
| Petitioners |
COMMISSIONER OF Income Tax
|
| Respondents |
AGHA YUSUF AND SONS
|
| Citations |
1969 SLD 738,
(1969) 20 TAX 40,
1969 PTD 633,
1969 PLD 617
|
| Other Citations |
1959 36 I.T.R. 464
|
| Laws Involved |
Income Tax Act, 1922
|
| Sections |
66(1),
26A
|