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Case Law Details

Case Name : GRK Agencies Vs ITO (ITAT Amritsar)
Appeal Number : ITA No. 412/Asr/2018
Date of Judgement/Order : 10/04/2019
Related Assessment Year : 2014-15
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GRK Agencies Vs ITO (ITAT Amritsar)

There is no merit in the argument that while a partnership deed is to be registered, the amendment thereto is not. The moot question, rather, is if it would stand to be registered in its’ present form, answer to which is an emphatic no. Again, it would similarly stand to be filed with the bank/s and the various other authorities and Government agencies with which the firm is, as a business entity, registered, i.e., apart from the income-tax, viz., sale-tax, excise, industries, pollution, etc. Being an amendment to the original partnership deed, it would consequently require being filed with the relevant authorities, i.e., where it has been already filed, being in fact only as it was in law obliged to. There is nothing on record to show, nor even a contention to that effect, of it being filed with any of the authorities. The question of whether it could be validly filed in the present form, continues, to again the same answer in-as-much as it cannot be regarded as a legally enforceable contract.

One could argue that even ignoring the resolution/s the total salary provided in the partnership accounts could be regarded as agreed to by the partners, i.e., from time to time. The same implies that there is no need for a separate written agreement, which cannot be accepted in view of the same being a requirement of law for a firm to be assessed as a firm (ss. 184, 185).

There was no merit in the argument that while a partnership deed is to be registered, amendment thereto is not. Amended salary clause being neither stamped nor registered, it was not admissible in evidence in a court of law, i.e., as a legally enforceable contract. Therefore, AO could not be faulted with for not giving cognizance to such a document and disallowance made by AO was justified.

FULL TEXT OF THE ITAT JUDGEMENT

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