INCOME TAX ACT, 1961

Section 184

Assessment as firm - AO treated status of assessee as an AOP, instead of firm - Allegation of AO that partnership deed was executed on an inadequate stamp paper -

Assessee challenged order of AO in treating the status of the partnership firm as AOP for the reason that partnership deed was executed on an inadequate stamp paper. Assessee contended that such condition was no where spelt out in provisions of section 184 or 185 of the I-T Act, 1961 and therefore, the stand taken by AO was incorrect. Held: Procedural laws merely prescribing the manner in which such rights and responsibilities may be exercised, in instant case the stamp paper on which the partnership deed was executed, cannot alter the status already determined substantively. Department was accepting all the genuineness of existence of the partnership firm and only for technical aspect of deed executed in the lessor denomination stamp paper, framed the assessment treating the assessee as AOP. Thus, in the totality of facts and circumstances, assessee was duly constituted partnership firm.

REFERRED : Thirumalai Chemicals Ltd. v. UOI (2011) 6 SCC 739 : 2011 TaxPub(EX) 816 (SC) Kailash v. Nanhku & Ors. (2005) 4 SCC 480, Bihari Lal Jaiswal & Ors. v. CIT & Ors. (1996) 217 ITR 746 (SC) : 1996 TaxPub(DT) 0628 (SC), CIT v. East India Lamp & Components (1981) 4 ITC 475 (Cal) : 1981 TaxPub(DT) 0876 (Cal-HC), CIT v. New Life Construction Company (1977) 107 ITR 361 (Bom) : 1977 TaxPub(DT) 0581 (Bom-HC), Chhotalal Devchand v. CIT (1958) 34 ITR 351 (Bom) : 1958 TaxPub(DT) 0157 (Bom-HC).

FAVOUR : In assessee's favour

A.Y. : 2012-13

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