DELHI BEOPAR MANDAL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal having declined the application of Messrs Delhi Beopar Mandal, New Delhi (hereafter referred to as the assessee) under Section 66 (1) of the Indian Income-tax Act, 1922, this Court by order dated 9th January, 1962, directed the Tribunal under Section 6)6 (2) of the said Act to refer the following three questions:-

(2.) IT is in the light of the above circumstances and findings that we have been called upon to answer the three questions referred to us.

(3.) SO far as the first question is concerned, the perusal of the document dated 27th October, 1936, clearly shows that it was a partnership. 'partnership' is defined by section 4 of the Indian Partnership Act as ". . . . the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all". The document shows that the partnership was constituted with a view to disposing of the plots of land mentioned therein and, as a matter of fact, the duration of the partnership was fixed as "until this plot of land or any other plots of land purchased are not disposed of after development. . . . . . ". The learned counsel for the assessee laid emphasis on the fact that the share of profits or losses was not fixed, which according to him, was a necessary condition of a partnership. I regret I am unable to agree because the interest of each partner in the partnership property was fixed, as mentioned already, and that would determine the interest of the partners in profits and losses. The learned counsel then contended that Clause 4 of the document permitted the acquisition of future properties with different interests therein. That may, at the most, be an agreement to enter into furture partnerships with respect of the properties acquired subsequently, but Clause 4 is certainly not destructive of the existence of a partnership with respect to the property in question. This question, therefore, must be answered in the affirmative and against the assessee.