9911796707
TMI Blog1983 (3) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... said deed, the building, machinery, furniture, fittings, air-cooling plant etc., installed in the Basant Cinema building become the assets of the firm. (d) By his Will dt. 5th July, 1973, Shri Moti G. Thadani bequeathed 2/3rd of his 72% share in the aforesaid partnership to his brother's wife, Smt. Padma Thadani and 1/3rd of his share to his brother, Shri Gulu thadani (the assessee). (e) On 17th September,1973, Shri Moti G. Thadani expired. (f) On 19th September, 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% share each, while Smt. Padmi Thadani had 50% share in the partnership, Here also as per cl. (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 26th November, 1974, the assessee gave a notice to the other partners intimating them his desi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such transfer has come forward, therefore, the assessee continues to remain the owner of 25% of Basant Cinema building, the rent from which has not been shown by him. As per provisions of sections 22 and 23 of the IT 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% 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 no doubt that in earning this hire the Basant Cinema has to incur various expenses in the maintenance, establishment etc. Therefore, considering all this aspects, 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. LV. is 1/4th which would be Rs. 18,000. No expenses on this can be allowed for repair, collection charges and taxes etc., as all these expenses are actually debi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excessive. Therefore, in my view, the sum of Rs. 18,000 has rightly been assessed as income of the appellant relatable to his 1/4th share in Basant Cinema and no relief is due to him on this account." 6. Being aggrieved by the order of the CIT(A), the assessee has come up in appeal before the Tribunal. The ld. 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 vs. CWT (1977) 108 ITR 214 (All). Inviting our attention to various documents mentioned above, more particularly cl. 3 of each of the deeds of partnership, the ld. counsel for the assessee submitted that once a partner brings in his immovable property in the partnership business, he no longer enjoys separate right, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at a partner is entitled to is his share of profits, it 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 during 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), (iii) of clause (b) of section 48" "........... his right during the subsistence of the partnership is to get his share of profits from time to time as may be agreed upon among the partners and after the dissolution of the partnership or with his retirement from partnership of the value of his share in the net partnership assets as on the date of dissolution o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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