TMI Blog1978 (6) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... n determining the net wealth of the assessee for the assessment year 1970-71, what the Wealth-tax Officer did was to compute the net wealth of the firm including the value of the agricultural lands therefor and thereafter giving a deduction under section 5(1)(iv-a) of the Act to the extent of the share held by the assessee in the firm, i.e., he deducted a sum of Rs. 18,750 in this behalf as the assessee had a 2/16th share in the firm. But in the assessment for the year 1971-72, what the Wealth-tax Officer did was to give a deduction of one lakh fifty thousand rupees, after ascertaining the wealth of the firm including the value of the agricultural lands therefor and thereafter apportioned the share of each of the partners in respect of their interest in the firm. The claim of the assessee was that she should be given a deduction in a sum of Rs. 1,50,000 under section 5(1)(iv-a), which was not accepted by the Wealth-tax Officer. The appeals preferred by the assessee to the Appellate Assistant Commiissioner of Wealth-tax in this behalf did not meet with success. On further appeals by the assessee to the Income-tax Appellate Tribunal the contention was accepted and the Tribunal held t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luding immovable property. Once that is done whatever is brought in would cease to be the exclusive property of the person who brought it in. It would be the trading asset of the partnership in which all the partners could have interest in proportion to their share in the joint venture of the business of partnership. The person who brought it in would, therefore, not be able to claim or exercise any exclusive right over any property which he has brought in, much less over any other partnership property. He would not be able to exercise his right even to the extent of his share in the business of the partnership. As already stated 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 or retirement after a deduction of liabilities and prior charges. It is true that even during the subsistence of the partnership a partner may assign his share to another. In that case what the assignee would get would be only that which is permitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the property of the firm is really the property of the partners and on the facts and in the circumstances of the case the assessee was the owner of agricultural land in the context of the Wealth-tax Act and had specified share in the immovable property though in a sense it may be said to be property of the firm and was entitled to the deduction. In support of this contention, reliance has been placed on the decision of the Supreme Court in Commissioner of Income-tax v. R. M. Chidambaram Pillai [1977] 106 ITR 292. The question for consideration in that case was whether the assessee, a partner in a firm, who in addition to a share in the profits, was entitled to salary for service under the firm, was entitled to apportionment of the salary as part being attributable to agricultural income and whether the salary had to be apportioned in the same proportion as income in the tea estate was to be apportioned. The Supreme Court, reversing the decision of the High Court of Madras in R. M. Chidambaram Pillai v. Commissioner of Income-tax [1970] 77 ITR 494 [FB], upheld the contention of the assessee that only 40 per cent. of the salary received was liable to income-tax as the remaining 60 pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dence, which we have adopted, for the purposes of determining legal rights ' there is no such thing as a firm known to the law ' as was said by James L.J. in Ex Parte Corbett : In re Shand [1880] 14 Ch D 122, 126 (CA). In these circumstances, to import the definition of the word ' person ' occurring in section 3(42) of the General Clauses Act, 1897, into section 4 of the Indian Partnership Act, will, according to lawyers, English or Indian, be totally repugnant to the subject of partnership law as they know and understand it to be. " Immediately following this quotation, the Supreme Court stated-(See [1977] 106 ITR 292, 299) : " In Addanki Narayanappa v. Bhaskara Krishnappa AIR 1966 SC 1300, 1303, the view taken by this court accords with the position above stated. " Considerable emphasis has been laid by the learned counsel for the assessee on this sentence and it is contended that in the light of the clear enunciation by the Supreme Court in this case explaining the scope and effect of the decision in Addanki Narayanappa's case, AIR 1966 SC, 1300, the assessee owned and had interest in the agricultural land and was entitled to the deduction under section 5(1)(iv-a) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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