Commissioner of Income Tax vs Hazarimal Milapchand Surana

S.K. Keshote, J.—Heard learned counsel for the parties.

On the application filed u/s 256 of the IT Act, 1961, the Tribunal, Jaipur Bench, Jaipur (for short ''the Tribunal'') preferred following question for our opinion :

"Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that M/s Hazarimal Milapchand Soorana and M/s Mannalal Nirmal Kumar Soorana & Co. could not in law be treated as one firm for purposes of assessment?"

Whether the firm M/s Mannalal Nirmal Kumar Soorana is an extension of assessee-firm, M/s Hazarimar Milapchand Soorana or not, that is basically a question of fact. The learned Tribunal has found finally that M/s Mannalal Nirmal Kumar Soorana & Co. is an independent firm and not an extension of M/s Hazarimal Milapchand Soorana. This finding of fact recorded by the learned Tribunal on appreciation of evidence on record, cannot be disturbed unless it is found perverse.

There is no dispute between the learned counsel for the parties about the facts on record that all the four partners have contributed capital. The State sales-tax and the Central tax authorities have granted them separate registration number treating them as genuine; even separate registration under the IT Act, 1961, has been granted to the firm, Mannalal Nirmal Kumar Soorana & Co, There cannot be two views unless a partnership firm is genuine, no registration can be granted. Subsequently the registration has been withdrawn but. in that year also the Tribunal gave a direction to grant registration of firm, Mannalal Nirmal Kumar Soorana & Co: The registration of the firm cannot be refused or the firm cannot be treated as just ''Benami'' of assessee-firm only on the ground that the partners and business thereof are common. When the books are separate, the partners have contributed capital, and books of account are not rejected in the case of Mannalal Nirmal Kumar Soorana & Co., in these facts, we fail to understand how the firm Mannalal Nirmal Kumar Soorana & Co. can be treated as just an extension of the assessee-firm.

Even if we proceed with this presumption and assumption for the sake of arguments that the view taken by the ITO is possible, but on that basis the view which has been taken by the learned Tribunal cannot be said to be perverse, unless the same is impossible. There is no material on record to suggest that this view taken by the learned Tribunal is perverse, no interference can be called for in this reference.

In the result, we answer the question in affirmative, i.e., in favour of the assessee and against the Revenue. The reference so made stands disposed of accordingly.