1923 (9) TMI 2

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....nd Premchand & Co., a partnership firm, and whether it constituted the said Saraladevi a partner of her husband Mr. Ambalal so as to render the business liable to be assessed separately to super-tax as an unregistered firm as required by Sections 3 and 4 of the Super-tax Act, 1920, as read with Section 12(1) of the Income Tax Act, 1918. 2. The answer to this question depends upon the view which we take of the said agreement of June 29, 1916. It is clear on reading Section 12(1) of the Indian Income Tax Act VII of 1918 with Section 3 of the Super-tax Act XIX of 1920, that if this agreement constitutes Karamchand Premchand & Co. a firm, then the requirements of Section 8 would be satisfied. It is common ground that it is, if a firm, an unreg....

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....d not constitute a partnership within the meaning of the Indian Contract Act. The document is sufficient, in my opinion, to constitute a partnership between the two executants of the document. The first clause of the document in terms provides that the said Saraladevi Ambalal has been admitted as a partner with the said Ambalal Sarabhai. Paragraphs 2 and 3 of the document have been relied upon as indicating that as the sole control of management, and the power of determining the partnership, and of admitting new partners are reserved by Mr. Ambalal only his wife is not constituted a partner in law by this document. I am unable, however, to accept this contention. 6. This reference has been made on the footing that the document evidences a ....

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....n the present case I see nothing to exclude the idea of combining property, labour or skill when and so far as necessary between the partners. The fact that the control is kept with Mr. Ambalal and that he has certain extra rights as a major partner does not in any sense negative a partnership according to law. It is open to two partners to agree, on the lines on which they have agreed in this case, to allow the business of the partnership to be conducted by one of the partners. 7. The real reason of the reference seems to be that this is an unusual document between husband and wife, and that it is difficult to accept the idea that they have become partners in law. In my opinion, they have become partners by this document within the meanin....