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TMI Blog1981 (2) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... hold and lease rights of the Premises No. 725, Chickpet. Bangalore City belonging to Smt. Puttathayamma of Bangalore, jointly the present rent of the premises being Rs. 250 per month. Whereas the fifth and sixth parties were originally, carrying on the business in the said premises in partnership and latter the sixth party carrying on his proprietary business in electrical good. Whereas the fifth party has since been desirous of changing his line of business and has been looking for some parties who would invest money and start a new business in partnership. Whereas the first, second, third and fourth parties hereto have been, along with one Sri D.A. Krishnia Setty carrying on the retail cloth business in partnership, in the name and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amongst the partners in the following proportion: . In In . Profit Losses 1. Sri. Mansukhlal P. Desai 22% 22% 2. Smt. Kanthabai A. Kapasi 22% 22% 3. Sri Manoharlal S. Parekh 21% 21% 4. Sri Chimanlal M. Sheth 15% 15% 5. Sri Kishore P. Shah 10% or Rs. 12,000 whichever is higher 6. Sri Harshad P. Shah. 10% or Rs. 12,000 Whichever is higher. Unit: 100% 80% As stipulated above the parties of the fifth and sixth part shall be entitled to a share profits at the rate of 10% or Rs. 12,000 whichever is higher. In the event of losses said parties of fifth and sixth part shall not but liab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or Rs. 12,000 whichever is higher. According to the Commr. therefore, as long as profits are more than Rs. 24,000 it is not clear from the cl. 7 as to how the two partners would be paid. There is thus, the Commr. stated, an ambiguity in the matter of distribution of profits. Accordingly he held that the partnership-deed does not satisfy the requirements of s. 184(i)(ii). Thus he directed cancellation of registration for the asst. yr. 1975-76 and continuation of registration for 1976-77. 2. Sri Kishore Mallya. ld. counsel for the assessee, argued that there is no ambiguity in cl. 7 though the said clause has not been drafted happily. According to him, the two partners who have brought their shop premises for the purpose of carrying on bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng into account the sum of Rs. 12,000 to be paid to each of the two partners 5 6. But the sum of Rs. 12,000 to each of the two partners which is the minimum payable irrespective of profits or not is in substance a payment for the use of the premises possessed by the two partners. The firm is paying a sum of Rs. 12,000 to each of them for the use of the premises beside the actual rent payable for the same. If this approach is taken the ambiguity or indefiniteness of the charges of the partners is resolved. Now let us take the way in which the working can be easily understood in accordance with that we have observed. Suppose there are losses, the loss would be increased by Rs. 24,000 and the partners 1 to 4 only would share as partners. Par ..... X X X X Extracts X X X X X X X X Extracts X X X X
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