TMI Blog1989 (2) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... ey lending, share income from K. M. K. Jagannathan and Co. and other sources. In relation to the assessment year 1972-73, the assessee admitted an annual letting value of Rs. 360 in respect of a house property owned by the assessee. This property was occupied by K. M. K. Jagannathan and Co., a firm, in which the assessee was also a partner, and under clause 8 of the deed of partnership, the entire premises owned by the assessee, except small portion in the occupation of another partner of the firm, was to be used for the purpose of carrying on the business of the firm and the monthly rent was fixed at Rs. 30. In the course of the assessment proceedings, the Income-tax Officer found that the monthly rent of Rs. 30 was only a nominal amount and on the basis of the municipal tax value, he estimated the annual letting value at Rs. 4,800 and completed the assessment on that footing. Aggrieved by this, the assessee preferred an appeal before the Appellate Assistant Commissioner and it was contended that under the terms of the deed of partnership, which was binding on the assessee as well as the other partner, the property cannot reasonably be expected to be let out at a higher rent and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss therein and the carrying, on of the business by the assessee, though as a partner in the firm, would be sufficient to enable the assessee to claim the benefit of section 22 of the Act. Our attention in this connection was drawn to the, decisions reported in CIT v. Rasiklal Balabhai [1979] 119 ITR 303 (Guj) and Addl. CIT v. N. Vaidyanathan (T. C. No. 307 of 1977, judgment dated 17-1-1983) [1989] 180 ITR 198 (Mad) (Appendix). With reference to the reliance placed on Smt. Sharada Bai's case, learned counsel drew our attention to Nawab Sir Mir Osman Ali Khan v. CWT [1986] 162 ITR 888 (SC) to contend that the dismissal of a special leave petition does not clothe that decision with the authority of the Supreme Court and that such dismissal cannot also be construed as the affirmation by the Supreme Court of the decision against which special leave to appeal was sought Before proceeding to consider these rival submissions, it would be useful to refer to sections 2 (23) and 22 of the Act, which read as under : "2 (23) `firm' `partner' and `partnership' shall have the same meaning respectively assigned to them in the Indian Partnership Act, 1932. " "22. The annual value of property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of carrying on its business is for the purpose of carrying on the business of the assessee ? We have already referred to section 4 of the Partnership Act and the underlying idea in that provision is that when a person enters into a partnership with another or others for carrying on business, such that when the partnership after its birth carries on business, it only reflects the constituent partners' way of carrying on their business according to their joint resolve and this principle is also reflected in section 67(2) of the Act. The scheme of the Act envisages an assessment of the firm's total income under its various heads of income and a partner would be subjected to assessment, inter alia, on his share income from the firm. It is in this context that section 67(2) of the Act provides that the assessable share of a partner in the income of the firm, shall, for purposes of his assessment, be apportioned under the appropriate heads of income under which the firm's income is assessed. If a firm is in receipt of business income or professional, income, assessable under the appropriate head, an aliquot part of the partner's share income from the firm should also be treated as his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt, as could be gathered from Smt. Sharada Bai v. CIT, we are of the view that that may not be of any assistance to the Revenue having regard to the pronouncement of the Supreme Court in Nawab Sir Mir Osman Ali Khan v. CWT [1986] 162 ITR 888, wherein it has been pointed out that the dismissal of a special leave petition in limine does not clothe that decision under special leave to appeal with the authority of a decision of the Supreme Court and that the dismissal of a special leave petition in the exercise of discretionary jurisdiction cannot be construed as an affirmation by the Supreme Court of the decision against which the special leave to appeal was sought. We are, therefore, unable to accept that the Supreme Court has accepted as correct the decision in CIT v. K. N. Guruswamy [1984] 146 ITR 34 (Kar). We may point out that in CIT v. Rasiklal Balabhai [1979] 119 ITR 303 (Guj), the assessee, who was a partner in a firm, owned a godown which was used by the firm as business premises and the Income-tax Officer estimated the annual letting value of the same and included it in the total income of the assessee (an individual). On appeal, the Appellate Assistant Commissioner upheld ..... X X X X Extracts X X X X X X X X Extracts X X X X
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