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2017 (8) TMI 1010 - HC - Wealth-taxWhether Section 13(b) of the Indian Partnership Act, 1932, could be invoked by the Revenue in the context of clause-7 of the Partnership Deed of the firm, M/s Saraf Trading Corporation - Held that:- In the absence of any specification in clause-7 of the Partnership Deed regarding the percentage of profit or loss per partner, the Revenue was entitled to take recourse to Section 13(b) of the Indian Partnership Act. Having considered this submission, we confess our inability to accept the contention. This is for the reason that there is no provision in the Partnership Act requiring that the Partnership Deed should contain the ratio of profit and loss per partner. If that be so, the partners are free to have a provision similar to clause-7, leaving the manner of apportionment to be decided by the partners. So long as this clause reflects an agreement between the partners, irrespective of its vagueness, Section 13(b) cannot be invoked. The upshot of the above discussion that the question of law raised as to whether the Revenue could rely on Section 13(b) of the Indian Partnership Act has to be answered against the Revenue and in favour of the assessee.
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