Partnership property transfer by intention: immovable property can pass to the firm without a registered deed if conduct and entries prove contribution.

A partner's immovable property may become partnership property without a registered deed if the intention to treat it as firm property is clearly shown. The text explains that section 14 of the Partnership Act recognises property brought into the stock of the firm or acquired for the firm, and that book entries, party conduct, and surrounding circumstances can establish the necessary intention. On that basis, the property ceased to be the individual partner's asset from 1-5-1979, so the income arising thereafter was not assessable in her personal hands. The discussion emphasises that registration is not indispensable where the factual intention to contribute the property to the firm is proved.

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Issues: Whether the assessee validly transferred her immovable property to the partnership firm without a registered deed, and whether the property income from 1-5-1979 was includible in her individual assessment.

Analysis: The decisive consideration was whether the property had been impressed with the character of partnership property by the intention of the partners. Section 14 of the Indian Partnership Act, 1932 treats as firm property property originally brought into the stock of the firm or acquired for the firm, and the authorities relied on showed that no registered instrument is required when a partner contributes immovable property to the firm, provided the intention to treat it as partnership property is established. The book entries, the conduct of the parties, and the surrounding circumstances were accepted as sufficient evidence of such intention, and the absence of a fresh deed or registered document did not defeat the transfer. On that basis, the property ceased to be the assessee's individual property from 1-5-1979.

Conclusion: The transfer was valid in law, and the income from the property from 1-5-1979 to 31-3-1980 was not assessable in the assessee's individual hands.

Final Conclusion: The revenue appeal failed, and the assessee succeeded on the substantive question of ownership and assessability of the property income.

Ratio Decidendi: When a partner clearly intends to bring immovable property into the stock of the firm as partnership property, that intention, evidenced by the parties' conduct and accounting entries, is sufficient to constitute a valid transfer without a registered deed, and the property thereafter belongs to the firm rather than the individual partner.

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