9911796707
TMI Blog1983 (3) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... By clause (3) of the said deed, the building, machinery, furniture, fittings, aircooling plant, etc., installed in the Basant Cinema building became the assets of the firm. (d) By his will dated 5-7-1973, Shri Moti G. Thadani bequeathed two-third of his 75 per cent share in the aforesaid partnership to his brother's wife, Smt. Padmi Thadani and one-third of his share to his brother, Shri Gulu Thadani (the assessee). (e) On 17-9-1973, Shri Moti G. Thadani expired. (f) On 19-9-1973, the assessee and the two ladies, namely, Smt. Padma Thadani and Smt. Padmi Thadani, entered into a fresh deed of partnership to carry on the cinema business as was carried on earlier by Shri Moti. G. Thadani and Smt. Padma Thadani. Under the fresh deed of partnership, Shri Gulu Thadani and Smt. Padma Thadani had 25 per cent share each, while Smt. Padmi Thadani had 50 per cent share in the partnership. Here also as per clause (3) of the deed of partnership, the building, machinery, furniture, fittings, air-conditioning and generating plants, etc., installed in the Basant Cinema building were treated as the assets of the partnership business. (g) On 26-11-1974, the assessee gave a notice to the other partn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion whether intestate or by way of probate. In this case, no evidence of any such transfer has come forward, therefore, the assessee continues to remain the owner of 25 per cent share of Basant Cinema building, the rent from which has not been shown by him. As per provisions of sections 22 and 23 of the Income-tax Act, it has to be now estimated. As per will, this property was fully furnished and well equipped on the date when the assessee became owner of 25 per cent share. The furniture, fixture and plant and machinery fixed with the building has become the part of immovable property. If the hire charges shown at Rs. 3,69,000 by the assessee in the Basant Cinema is of any indication of the market value of this building and its locality then the fair market rent of this can be estimated on this basis. It is of no doubt that in earning this hire, the Basant Cinema has to incur various expenses in the maintenance, establishment, etc. Therefore, considering all this aspect, the total rent of the Basant Cinema is estimated at the rate of Rs. 6,000 per month which will mean Rs. 72,000 per year. The assessee's own share from the above A.L.V. is one-fourth which would be Rs. 18,000. No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uilding) Assessment year: 1977-78 As regards the quantum, the IAC (Assessment) seems to have worked out the sum of Rs. 18,000 in a logical manner and I do not find it to be unreasonable or excessive. Therefore, in my view, the sum of Rs. 18,000 has rightly been assessed as income of the appellant relatable to his one-fourth share in Basant Cinema and no relief is due to him on this account. " 6. Being aggrieved by the order of the Commissioner (Appeals), the assessee has come up in appeal before the Tribunal. The learned counsel for the assessee once again reiterated the submissions which were made before the income-tax authorities and contended that the income-tax authorities have failed to appreciate the assessee's case in proper perspective. He further submitted that in the case of partners bringing immovable properties into the partnership business, there was no question of any registered document which the income-tax authorities have failed to appreciate. For this proposition, reliance was placed on the decision of the Hon'ble Allahabad High Court in the case of K.D. Pandey v. CWT [1977] 108 ITR 214. Inviting our attention to various documents mentioned above, more particula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lear that whatever may be the character of the property which is brought in by the partners when the partnership is formed or which may be acquired in the course of the business of the partnership it becomes the property of the firm and what a partner is entitled to is his share of profits, if any, accruing to the partnership from the realisation of this property, and upon dissolution of the partnership to a share in the money representing the value of the property. No doubt, since a firm has no legal existence, the partnership property will vest in all the partners and in that sense every partner has an interest in the property of the partnership. During the subsistence of the partnership, however, no partner can deal with any portion of the property as his own. Nor can he assign his interest in a specific item of the partnership property to anyone. His right is to obtain such profits, if any, as fall to his share from time to time and upon the dissolution of the firm to a share in the assets of the firm which remain after satisfying the liabilities set out in clause (a) and sub-clauses (i), (ii) and (iii) of clause (b) of section 48......." "...his right during the subsistence o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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