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TMI Blog1958 (10) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Ramniklal Sunderlal. It is mentioned in the agreement that income derived from certain properties shall be divided by all the partners in equal shares and that income from leases also will be divided between the partners in equal shares. The work pertaining to courts, offices, recovery of rents etc., was agreed to be done by the father Ramniklal with the consent of the other partners. Later on there is a clause which says: This firm shall be entitled to carry on this partnership business and over and above this business any other business with the consent of all the partners. The assessment year is 1953-54. Neither in the relevant year nor in the years previous to that there was any dealing in land at all by the partnership. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inted out by learned counsel that it is not one piece of land but there are several plots of land in Ahmedabad City which have been let out to a number of mills which pay ground rent to the partnership. Expenses have to be incurred in the management of the affairs of the business of the partnership and the expenses are in respect of the maintenance of a motor car and payment of telephone charges. The third factor to which our attention has been drawn is that in the assessment year 1950-51 the assessee was assessed on an income of ₹ 99 from speculation in shares. Now, it is true that there is here an agreement which is one of the essential elements of the existence of a partnership. We shall take it that the element of agency and au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hip of partners does or does not exist in not one of form but of substance. It is one of the real intention and contract of the parties, which intention must be gathered from all the facts and circumstances of the case. It is not a matter merely of the expressed intention of the parties. Persons who have described themselves as partners have been held not to be so; and persons who have not described themselves as partners have been held to be partners by applying the tests very briefly stated above. Section 2(1) of the English Partnership Act states a proposition which is at times very useful in dealing with cases of joint owners or part owners of property. That sub-section is as under: Joint tenancy, tenancy in common, joint proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a house agree that one of them should have the general management and provide funds for the necessary repairs so as to render the property fit for the habitation to tenants and agree to divide the net rent between them, It cannot be said that they are carrying on a business or that they have become partners. We do not intend to be understood to suggest that there may not be partnership between the owners of a property. There can be partnership between the owners of a property if they deal with the same in such a manner as to amount to carrying on of a business. The test to determine whether co-owners sharing profits of any property are partners or not is to inquire whether there is really a common business and whether the business is bei ..... X X X X Extracts X X X X X X X X Extracts X X X X
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