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TMI Blog1969 (7) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... own as Rambagh Palace?" In paragraph 3 of the statement of the case, it has been stated that Messrs. Amber Corporation, Jaipur the assessee, was a partnership firm which carried on a hotel business at Rambagh Palace (at Jaipur) and land appurtenant thereto was valued at Rs. 25,00,000. The four sons of Maharaja Man Singh brought in the building (Rambagh Palace) as their contribution of capital along with a cash of Rs. 25,000 each. The Maharaja contributed his share in the form of furniture and cash amounting to Rs. 1,71,388. In its returns for the assessment years 1959-60 and 1960-61, the firm claimed depreciation on that building. The claim of the assessee was that the Rambagh Palace was capital contributed by the four partners of the firm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e second, third and fourth parts and the said minor. Whatever additional capital required for the purpose of the partnership shall be brought in by the party of the first part. 6. The net profits of the partnership shall be divided between the partners in the shares following: Maharaja Shri Sawai Mansinghji Saheb 24 cents Capt. Maharaj Kumar Bhawani Singh ji 19 ,, Maharaj Kumar Jaisinghji 19 ,, Maharaj Kumar Prithviraji 19 ,, Minor admitted to the benefits of the partnership 19 ,, In the event of loss the same shall be divided between the parties in the proportion of 25 cents each. 7. The death of any partner shall not dissolve the partnership. 8. On the dissolution of the firm, the said party of the first part shall have no share ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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." The argument that has been addressed to us is that in clause 8 of the agreement of partnership, the Maharaja of Jaipur was to have no share in the Rambagh Palace on the dissolution of the firm and it was stipulated that the building shall not be valued, but the same shall be taken over by the parties thereto of the second, third and fourth parts and the said minor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. It is not that the four sons of the Maharaja did not intend to contribute as capital the palace itself but only the use thereof. There are cases in which the contribution is only of the use of a building and not of the building itself. Reference in this connection may be made to section 20 of the English Partnership Act, 1890, which relates to the partnership property and under which such a distinction is drawn. Sub-sections (1) and (3) of this section are relevant. They run as follows: "20. Partnership property.-(1) All property and rights and interests in property originally brought into the partnership stock or acquired, whether by purchase or otherwise, on account of the firm, or for the purposes and in the course of the partnership ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, it cannot be held that Rambagh Palace was part of the capital contributed by the four sons of the Maharaja. The question referred to us does not expressly say that we have to answer this point. On the other hand, in paragraph 3 of the statement of the case, it has been expressly stated that the palace was brought in by the four sons of the Maharaja as their contribution of capital. We may quote in extenso that paragraph at this place: "3. This partnership was formed to carry on a hotel business and the partnership name was Amber Corporation. The Palace and land appurtenant thereto was valued at Rs. 25,00,000. The four sons of the Maharaja brought in the building as their contribution of capital along with a cash of Rs. 25,000 each. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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