Partnership property from immovable asset contributions does not need separate registration, and depreciation on the asset was allowable.

Property contributed by partners to a firm's common stock becomes partnership property under section 14 of the Indian Partnership Act, so no separate registered instrument is required merely because the contribution is immovable property. On that basis, the contributed asset was treated as part of the firm's assets in favour of the assessee. Depreciation on the property was also allowable under the applicable income-tax law, as the point had already been decided between the same parties for earlier assessment years and that view was followed. The overall position therefore supported the assessee on both the partnership-property and depreciation questions.

---

---

Issues: (i) Whether immovable property contributed by partners as capital to the partnership required registration before it could become partnership property. (ii) Whether the assessee was entitled to depreciation in respect of the property under the income-tax law applicable to the assessment year.

Issue (i): Whether immovable property contributed by partners as capital to the partnership required registration before it could become partnership property.

Analysis: Section 14 of the Indian Partnership Act treats property brought into the common stock by the partners, or acquired for the firm, as property of the firm. On that principle, property contributed by a partner becomes part of the partnership assets, and no separate registered instrument is necessary merely because the contribution is immovable property.

Conclusion: The answer is in the negative against the revenue and in favour of the assessee.

Issue (ii): Whether the assessee was entitled to depreciation in respect of the property under the income-tax law applicable to the assessment year.

Analysis: The question had already been answered between the same parties for earlier assessment years, and the prior decision was treated as binding. Following that view, the claimed depreciation on the property was allowable.

Conclusion: The answer is in the affirmative in favour of the assessee.

Final Conclusion: The reference was answered on both questions in a manner supporting the assessee, confirming that the contributed property formed part of the firm's assets without registration and that depreciation was allowable.

Ratio Decidendi: Property contributed by partners to the common stock of a firm becomes partnership property under section 14 of the Partnership Act without the need for registration, and depreciation on such property is allowable where the applicable income-tax provision so permits.

---