sudhir rawal (B.COM/PCC/ARTICLE/'O'LEVEL) (314 Points)
29 April 2010dear friends
i have one query that
is partnership firm is include in definition of persons
CA AYUSH AGRAWAL
(Kolkata-Pune-Mumbai)
(26986 Points)
Replied 29 April 2010
No.......
Bcoz its Not a Legal Person
and Partners are personally liable & Their liability is unlimited.
Max Payne
(employed)
(2569 Points)
Replied 29 April 2010
^^^
But Person includes Firm as per 2(31) of the Income tax act.
I think this is IT query.....
CA Dhiraj Ramchandani
(CA, M. com)
(10823 Points)
Replied 29 April 2010
Nope.. A partnership is not a person in eyes of law...
The partners of the firm are personally liable for the acts of the firm
|
The term 'person' is not defined by the Partnership Act. Section 2(42) of the General Clauses Act defines 'a person' to include a company or an association or body of individuals, whether incorporated or not. But the Supreme Court has held that this definition cannot be imported into the Partnership Act, and the 'person' under the Partnership Act means either an individual or any other legal entity such as a Limited Company registered under the Companies Act, or any other Corporation constituted by or under any act of the Legislature as a body corporate. The Supreme Court has observed that it is now well settled that Hindu Undivided Family cannot as such enter into a contract of partnership with another person or persons because it is a fleeting body, its composition changes by births and deaths, marriages and divorces and such a partner- ship is likely to have a precarious existence. It, therefore, follows that a body of individuals such as an unincorporated society cannot as such become a partner in a firm. It also follows that a partnership firm cannot as such enter into a partnership with another individual or legal entity, or with any other partnership firm because a partnership as such is not a .person. But in the case of H.U.F. the Karta of the family or a member thereof can become partner with another individual or with other legal entity or even with the partners or partner of a partnership firm because in such a case It is the Karta or the individual member who is the partner for all purposes and not the joint family whom he represents and the family does not become a partner of the firm. It has been held that when two Kartas of two H.U.Fs. enter into a partnership agreement, the partnership though popularly known as one between the two HUFs, in the eye of law, it is a partnership between two Kartas and the other members of the two families do not 'ipso facto' become partners. There is nothing to prevent individual members of one H. U. F. from entering into a partnership with the individual members of another H.U.F. and in such a case it is the partnership between the individual members and it is wholly inappropriate to describe such a partnership as one between two HUFs. When the Karta of a H.U.F. enters into a partnership with a stranger the members of the family do not ipso facto become partners in that firm and they have no right to take part in its management or to sue for its dissolution. |
CA Sanjay Jha
(ACCOUNTS MANAGER)
(914 Points)
Replied 29 April 2010
As per IT act 1961 u/s 2(31)
Person Includes
an individual
a company
a firm
an AOP or BOI
a local authority
every artificial judicial persons not falling other category.
Poornima Srinivasan
(Junior trainee)
(330 Points)
Replied 29 April 2010
As per IT Partner ship firm is person...
But in the eyes of law it is an artificial person and the partners are liable to the liabilities.
parinita jadhav
(Article trainee)
(166 Points)
Replied 29 April 2010
as per defination of person, "firm" is eligible
sudhir rawal
(B.COM/PCC/ARTICLE/'O'LEVEL)
(314 Points)
Replied 29 April 2010
thanks to all for solving this query
but still their are doubt that
include or not
because when we are going to assess their income the income is always being part of partners nor firm
kindly solve this again
thanks once again
sudhir rawal
(B.COM/PCC/ARTICLE/'O'LEVEL)
(314 Points)
Replied 29 April 2010
i found my answer
in section 2(23)
"“firm” shall have the meaning assigned to it in the Indian Partnership Act, 1932"
and under partnership act 1932
Partnership Firm is not a legal entity - It may be surprising but true that a Partnership Firm is not a legal entity. It has limited identity for purpose of tax law. As per section 4 of Indian Partnership Act, 1932, 'partnership' is the relation between persons who have agreed to share the profits of a business carried on by all or any one of them acting for all. - - Under partnership law, a partnership firm is not a legal entity, but only consists of individual partners for the time being. It is not a distinct legal entity apart from the partners constituting it - Malabar Fisheries Co. v. CIT (1979) 120 ITR 49 = 2 Taxman 409 (SC).
CA Shiv
(Business Controller)
(2987 Points)
Replied 29 April 2010
my friend. the income wont be treated as income of partners for income tax. it will be treated as income of firm and tax will be paid by partnerhsip firm and the profit will be shared between the partners....which is non taxable for them.....
PRADEEP REDDY
(CHARTERED ACCOUNTANT)
(664 Points)
Replied 29 April 2010
as per the provisions of income tax person includes firm
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