| Case ID |
319805c4-8301-41b8-a597-96d42a9b3870 |
| Body |
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| Case Number |
58 OF 1981 |
| Decision Date |
Dec 26, 1984 |
| Hearing Date |
|
| Decision |
The court held that the assessee-firm was validly constituted under the provisions of the Partnership Act and was entitled to registration under the Income-tax Act. The court found that the activity of leasing out assets such as plant, machinery, and godowns constituted a business activity, as it involved systematic and organized efforts to maintain these assets for commercial use. The court determined that income derived from these leasing activities was business income, affirming the Appellate Tribunal's decision to grant registration to the firm. |
| Summary |
This case revolves around the registration of a partnership firm under the Income-tax Act, 1961. The assessee-firm, previously engaged in the business of redrying tobacco, was dissolved in 1963, with its assets being leased out to another firm. The Income-tax Officer refused registration, asserting that the firm did not carry on any business activity. However, the Appellate Assistant Commissioner and subsequently the Tribunal held that the firm was indeed engaged in a systematic and organized activity by maintaining and leasing commercial assets. This decision emphasized the broad interpretation of 'business' under the Indian Partnership Act, which includes any occupation that engages a person's attention for livelihood. The court ultimately ruled in favor of the firm, allowing for its registration and affirming that income from leasing these assets constituted business income. Keywords include: Income-tax Act, Partnership Act, business registration, commercial assets, leasing, systematic activity. |
| Court |
High Court
|
| Entities Involved |
Not available
|
| Judges |
K. Amareswari,
Y.V. Anjaneyulu
|
| Lawyers |
M.S.N. Murthy,
M.J. Swamy
|
| Petitioners |
Commissioner of Income Tax
|
| Respondents |
K. Ramaiah,
K. Ramakrishna Murthy
|
| Citations |
1986 SLD 1498,
(1986) 159 ITR 929
|
| Other Citations |
CEPT v. Shri Lakshmi Silk Mills Ltd. [1951] 20 ITR 451 (SC),
Capital Foundry & Engineering Works v. CIT [1982] 138 ITR 833(P&H),
Dal Chand & Sons v. CIT [1968] 69 ITR 247 (P&H),
Narain Swadeshi Wvg. Mills v. CEPT [1954] 26 ITR 765 (SC),
Nauharchand Chananram v. CIT [1971] 82 ITR 189 (P&H),
Ray Talkies v. CIT [1974] 96 ITR 499 (Pat.)
|
| Laws Involved |
Income-tax Act, 1961,
Indian Partnership Act, 1932
|
| Sections |
185,
2(b),
4
|