Can same partners form another firm

Dear Indudhar

Though same partners can form another firm with the same constitution and at the same place there will be no additional benefit to the two firms as the Income-tax Department treats the both firms as one firm and the income of both the firms will be clubbed.  Many courts have decided the matter in favour of the Revenue.  Please refer the following cases

Vissoni Son & Co., Vs.CIT

(1946) 14ITR272 (B0m)

Dy.CST(Law), Board of Revenu (Taxes) Vs.Kelunkutty

(1985) 155 ITR 158 (SC)

CIT Vs. G.Partha Sharthy Naid & Co., & Ors.

(1999)236 ITR 350 (SC)

With Best Wishes

Sincerely Yours

Sathikonda

Hi Indudhar,

I believe,

Same partners can form another Partnership firm with the same constitution and at the same place but the nature of business can not be same. According to the partnership firm the partners (individual) of the firm cant indulge in the business with the same nature against the permission of the firm. moreover they (partner) need to disclose the profit earned with that business to the firm