TMI Blog1982 (12) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... ember 6, 1964, was executed by all the five partner-brothers. Three house properties were purchased in the names of these brothers. The first sale deed is dated August 12, 1960, while the second and third sale deeds are dated February 6, 1966, and July 3, 1967. The total consideration under these three sale deeds is Rs. 1, I 0,000. The cost of the properties was debited in the books of the firm, though they were purchased in the joint names of the five partners. Right from 1963, these properties were being treated as the properties of the firm, whereupon the firm was claiming depreciation as well. The income from these house properties was treated as the income of the firm and was divided among the partners along with the other partnershi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount books of the firm cannot have the effect of transferring the firm's properties to the individual partners. He also took note of the fact that on April 1, 1973, the partners executed a deed dividing these house properties among themselves in specified shares, and observed that at any rate up to March 31, 1973, these properties were being treated as the firm's properties and must be assessed as such in the hands of the assessee. When the matter came before the Tribunal, it agreed with the AAC. It found that the cost of the properties was debited in the books of the firm though they were purchased in the names of the five partners and that the properties were acquired with the funds of the partnership firm. The Tribunal further found th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tners, with definite and ascertainable shares, so as to constitute themselves into an association of persons so that the share of each partner in the income from the property is includible in his total income ? " The questions referred to us are premised on the assumption that the Properties once belonged to the firm. The question posed is whether by making entries in the account books of the firm, these properties can be treated to have become the properties of the partners in their individual capacity, thereby ceasing to be the firm's properties. Mr. S. Dasaratharama Reddy, learned counsel for the assessee, concedes that if the properties are taken as having belonged to the firm at one time and if they are sought to be transferred to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion of the Supreme Court in Narayanappa's case, AIR 1966 SC 1300, that a partner cannot at any given point of time claim any of the firm's properties to be his notwithstanding the fact that at one time they belonged to him and that he had put the properties into the assets of the firm. It has been found by the Tribunal and also the lower authorities as a fact that right from the inception of the firm, these properties were treated as the firm's properties and the firm claimed depreciation on these properties also and that the income from these properties was treated as the firm's income and accordingly divided between the partners. Another significant finding is that the properties were also acquired with the funds of the firm and the cost ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
