AIR 1967 CALCUTTA 429 ::38 Com Cas 117 ::67 ITR 771 ::1967 (1) ITJ 568 ::ILR (1968) 2 Cal 557

Calcutta High Court

Hon'ble Judge(s): P. B. Mukharji, C. N. Laik , JJ

(A) Income-Tax Act (11 of 1922) , S.24(1), S.23(5)(a), S.23(5)(b), S.3— Income-Tax Act (43 of 1961) , S.71, S.182, S.183, S.4(1), S.28(1)— Three separate limited companies incorporated under Companies Act entering into joint venture as unregistered firm - Nature of such venture - Distinction between partnership under Partnership Act and Income-tax Act. Partnership Act (9 of 1932) , S.4, S.9, S.10, S.11, S.12, S.13, S.14, S.15, S.16, S.17, S.18, S.19, S.20, S.21, S.22, S.23, S.24, S.25, S.26, S.27, S.28, S.29, S.30, S.39, S.40, S.41, S.42, S.44, S.45, S.46, S.47, S.48, S.49, S.50, S.51, S.52, S.53, S.54, S.55— When three separate limited companies incorporated under the Companies Act carry out a joint venture as an unregistered firm, the venture is neither a partnership under the Partnership Act nor the income-tax entity of an unregistered firm of partnership under the Income-tax Act. It can only be regarded as an association of persons under Section 3 of the Income-tax Act.(Para 14-17 27) Notionally and juristically if two incorporated companies under the Companies Act enter into a partnership then each company becomes an agent for the other and agrees to share the profits. This will create many problems for the two incorporated companies. They will have to be therefore agents for each other ....