COMMISSIONER OF INCOME TAX Vs. S K BOSE

JUDGEMENT

(1.) Four persons, namely Gostodhan Chatterjee, Krishna Chandra Chatterjee, Prithwis Chandra Biswas and Santosh Kumar Bose, started a business in co-partnership in the firm name of Popular Transport Service, under a deed of partnership dated the 1st July, 1945 with equal shares in the firm. Subsequently the aforesaid four partners agreed to introduce one Dhirendra Nath Banerjee as the fifth partner of the firm, The original four partners reduced their joint holding in the firm to 29/30th part of the business and the new partner was allotted the remaining 1/30th share. The aforesaid five partners carried on the business of the firm till the 21st July, 1952. On that date a deed, described as a deed of transfer, was executed by and between the said Prithwis Chandra Biswas, Santosh Kumar Bose, Gostodhan Chatterjee, Krishna Chandra Chatterjee and Dhirendra Nath Banerjee described therein as parties of the first, second, third, fourth and fifth part respectively and Bhagwan Shaw, Lachmi Narayan Shaw, Munilal Shaw and Sunitendra Mohan Tagore, described therein as parties of the sixth, seventh, eighth and Ninth part respectively. The following are some of the recitals in the aforesaid deed: Whereas the parties of the First to Fourth parts are desirous of transferring and assigning their 29/30th share or interest in all the assets, goodwill, stock-in-trade, stage carriages and structures of the tenanted land and premises No. 14 Ultadange Road free from encumbrances and liabilities at or for Rs. one lakh forty-five thousand. And whereas the parties hereto of the sixth, seventh, eighth and ninth parts are willing to purchase the said undivided 29/30th part or share in the business of Popular Transport Service its goodwill, assets, properties, stage carriages fully described in the Schedule free from liabilities and encumbrances at or for Rs. One lakh forty-five thousand provided the party hereto of the Fifth part consent to such transfer and assignment and will agree to admit them as partners to the firm and reconstitute the firm accordingly and whereas the party hereto of the fifth part has agreed to consent to the transfer in favour of parties of the sixth to ninth parts by the parties hereto of the first to fourth parts in the manner hereinafter appearing upon their agreeing to purchase the undivided 1/30th part or share in the business of Popular Transport Service its goodwill, assets, properties, four stage carriages free from liabilities and encumbrances at or for Rs. 5000 which the parties hereto of the sixth to ninth parts have agreed.

(2.) The operative clause of the deed provided that in consideration of the payment of the said sum of Rs. 1,45,000 the parties of the first to fourth parts granted, transferred, conveyed and assigned and the party of the fifth part confirmed unto the parties of the sixth to ninth parts of all that the undivided 29/30th part of or share in all that business of Popular Transport Service with goodwill, assets, stage carriages, structures on rented land, benefits of road permit and of the tenancy fully described in the schedule and all their right, title and interest therein absolutely and for ever, free from all encumbrances.

(3.) Subsequently on the same date, namely the 21st July, 1952 another deed described as a deed of sale, was executed by Dhirendra Nath Banerjee as the vendor in favour of the aforesaid Sunitendra Mohan Tagore, Lachmi Narayan Shaw, Manilal Shaw and Bhagwan Shaw described as the purchasers. In the said Deed it was recited as follows : Whereas the parties hereto are the partners of the Popular Transport service and whereas the vendor has 1/30th part or share in the said business while the Purchasers are holders of the remaining 29/30th part of or share in the said business and whereas the vendor has agreed to sell and the purchasers have agreed to purchase his undivided 1/30th part of or share in the said partnership business of Popular Transport Service its assets, stock-in-trade, book-debts, goodwill including the Public Stage Carriages, Nos. WBS-729 WBS-730, WBS-760, and WBS-811 free from all liabilities at or for Rs. 5000. The deed went on to witness that in consideration of the payment of Rs. 5000 the Vendor granted, transferred conveyed, assigned and assured unto the purchasers all that his undivided. 1/30th part or of share in the business of Popular Transport Service its goodwill, book-debts, stock-in-trade, public stage carriages etc. and all other assets absolutely and for ever free from all liabilities and encumbrances.