| Case ID |
ec305c42-3df1-425c-956b-06b84587ec4c |
| Body |
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| Case Number |
CIVIL APPEAL No. 1242 OF 1968 |
| Decision Date |
Oct 11, 1971 |
| Hearing Date |
|
| Decision |
The Supreme Court ruled in favor of the appellant firm, determining that the partnership deed dated March 20, 1959, constituted a valid partnership under the law. The Court found that the essential conditions of sharing profits and losses were satisfied, and that the business was carried on by the managing partner on behalf of all partners. The decision of the Mysore High Court was reversed, affirming the registration of the firm under section 26A of the Income-tax Act. This decision underscores the principle that the mere control of one partner does not negate the existence of a partnership, provided the essential elements of partnership are present. |
| Summary |
In the landmark case of K.D. Kamath and Co. v. Commissioner of Income Tax, the Supreme Court addressed the validity of a partnership deed under the Income-tax Act. The case revolved around the interpretation of sections 185 and 26A of the Income-tax Act, alongside section 4 of the Indian Partnership Act. The Supreme Court determined that the partnership deed constituted a valid partnership, emphasizing the importance of profit-sharing and operational authority among partners. The ruling clarified that control by one partner does not invalidate the partnership as long as the essential elements of partnership are met. This case serves as a pivotal reference in understanding partnership law and its application in tax matters, highlighting the balance between management authority and partnership rights. |
| Court |
Supreme Court of India
|
| Entities Involved |
Not available
|
| Judges |
C. A. Vaidialingam,
P. Jaganmohan Reddy
|
| Lawyers |
S.K. Venkataranga Iyengar,
J.Ramamurthi,
S.K. Aiyar,
R.N. Sachthey
|
| Petitioners |
K.D. Kamath and Co.
|
| Respondents |
Commissioner of Income Tax
|
| Citations |
1971 SLD 614 = (1971) 82 ITR 680
|
| Other Citations |
Steel Bros & Co. Ltd. v. CIT [1958] 33 ITR 1 (SC),
Balu Shai Gulabdas Navlakhi v. CIT [1962] 46 ITR 492 (Bom.),
CIT v. Pathrose Rice & Oil Mills [1960] 40 ITR 353 (Ker.),
CIT v. R.S. Shoe Factory [1963] 47 ITR 917 (All.),
Murilidhar Kishangopal v. CIT [1963] 50 ITR 628 (MP),
City Tobacco Mart v. CIT [1967] 64 ITR 478 (Mys.),
M.P. Davis v. Commissioner of Agricultural Income-tax [1959] 35 ITR 803 (SC),
Umarbhai Chandbhai v. CIT [1952] 22 ITR 27 (Bom.),
Agarwal & Co. v. CIT [1970] 77 ITR 10 (SC),
Commissioner of Income-tax v. A Abdul Rahim & Co. [1965] 55 ITR 651 ; [1965] 2 SCR 13 (SC),
P.A.C. Ratnaswamy Nadar & Sons v. CIT [1962] 46 ITR 1148 (Mad.)
|
| Laws Involved |
Income-tax Act, 1961,
Indian Partnership Act, 1932
|
| Sections |
185,
26A,
4
|