{"id":266814,"date":"2010-11-02T00:00:00","date_gmt":"2010-11-01T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/the-commissioner-of-income-tax-vs-ms-s-b-pannalkar-co-on-2-november-2010"},"modified":"2019-02-27T15:45:24","modified_gmt":"2019-02-27T10:15:24","slug":"the-commissioner-of-income-tax-vs-ms-s-b-pannalkar-co-on-2-november-2010","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/the-commissioner-of-income-tax-vs-ms-s-b-pannalkar-co-on-2-november-2010","title":{"rendered":"The Commissioner Of Income Tax vs M\/S S B Pannalkar & Co on 2 November, 2010"},"content":{"rendered":"
Karnataka High Court<\/div>\n
The Commissioner Of Income Tax vs M\/S S B Pannalkar & Co on 2 November, 2010<\/div>\n
Author: N.Kumar And Adi<\/div>\n
 _ BIJAEPUR. V\n\nIN THE HIGH COURT or KARNATAKA cincvlfr'\n\nAT GULBARGA __ \nDated this the 2\"\" day of N0vembe_r.~  V \n\npREsENf'\n\nTHE HON'BLE MR,JUsT1cr;\"N.KUM4\u00e9R:v': 1  \n\nTHE HON'BLE MR.,.1JUsi*i\u00a2'E' 1' SiIBHASHV \"I3.AD1\n\nITA    \n\nBETWEEN :\n\nTHE COMMISSJQNER OF 'INQQME jimx\nKH1MJIBr--I0T1'COMMERCW. COMPLEX\nopp. CIVIL_HOS.P1TAL   --  . '\nBELGA'UM--'590'O0.'1-._  \"\n\nTHE I;\\Icc5'M_E\" TAX .o'F*F\u00a3c1i:R\nWARI).--2 '   '-\n\n. APPELLANTS\n\n' ' .(;\u00a74Y Sm  KUMAR DESHPANDE, ADV.)\n\n\n\n 'V V' 1').I3LIVER;E}I) THE FOLLOWING;\n\nix.)\n\nAND:\n\nM\/S SB. PANNALKAR 8: CO..\nBIJAPUR ROAD\nJAMKHANDI.\n\n{BY SR1. ASHOK KULKARNI, -AAD:\\fu.' -I?OR\"-- \"  \nSRI. K.R. I:>RASAD',,A::x_v.) \"\n\nTHIS INCOME TAX APPEAL-IS FIL.EI)\u00abUNDER\u00a7 SECTION\n260--A OF' IT. ACT, 195.1 ARIS-I-NG*0U'_F OF 'O-RD.ER DATED\n30-06-2006 PASSED IN __ITA NO.3623._\/BANG\/2004, FOR THE\nASSESSMENT YEAR 2001-I02, ':?RAI;'1NOjO_TIIAT THIS HON'BLE\nCOURTMAY BE PLEASED TO;  j  \ni} FORMULATE THE SUBS. QUESTIONS OF LAW\n\nSATED THEIREIN'g_.'~  _ _ \n\n1'1) ALLOW THE AP;REAI,'A.ND.'SE'I'\"'ASIDE THE ORDER PASSED\nBY  ITAT \"'i:::I:SAI~IGALORE----V\" BENCH 'B' IN ITA\nNO.3623\/BANG\/'.2002;-I DATED 30-06-2006 AND CONFIRM\nORDER PASSED THVE---.ASISESSING AUTHORITY, IN THE\nINTERESTS' OF JUSTICE-.AN--.t_)\"EQU1TY.\n\n.  APPEAL COMENG ON FOR HEARING, N.KUMAR, J.,\n\n \"  \n\n\n\nJUDGMENT\n<\/pre>\n
The revenue has preferred this appeal
\norder passed by the Tribunal which held
\ncomplied with the provisions of Section  and
\nentitled to the bene\ufb01t of deduction <\/p>\n
1961.\n<\/p>\n
2. The assessee_\ufb01j’.\\\/I\/:03 lB–.__’~.\u00a5?’annalkar & Co., a
\npartnership firm is carr_yingV..Von__ the””‘busl\u00a3tiess of liquor on<\/p>\n
wholesale bas_lils.’l5f_Thel31iquor~licence stood in the name of one of
\nthe partners.” fih’c..plilc-fence”-was”.not transferred to the name of<\/p>\n
the assessee andilit Vcontinueld to be in the name of the partner.<\/p>\n
‘0 lffhe “a.s:seissee’i– zcarI*ied'”mon this wholesale business using the<\/p>\n
“ii..\u00a2e;._;\u00a7;e’ by the firm and therefore the Assessing<\/p>\n
Autliority dislallolxred the remuneration paid to the partners and<\/p>\n
 the interest on capital, vide order dated 23.03.2004. Aggrieved<\/p>\n
    same, the assessee filed an appeal before the<\/p>\n
 ___”‘l\u00ab.Cofnmissioner of income Tax (Appeals) Belgaum. The appeal<\/p>\n
came to be allowed by order dated 18.09.2004. Aggz~iev’ed by<\/p>\n
the same, the Revenue preferred an appeal before <\/p>\n
which came to be dismissed affirming the order”p_e1ssed   <\/p>\n
Appellate Tribunal. Aggrieved by  sanfiet t1f:eAlV’E”{everi.{,l1e  h<\/p>\n
before this Court.\n<\/p>\n
3. The appeal was admpititeldohl’*2\u00a7\u00a7.02.t2GO.7..to consider<\/p>\n
the following substantial 0[uelst:to11_sf’ot7 1ei\u00a72’v::?_  <\/p>\n
” 1)   t.:Appelldte”Authority and<\/p>\n
Vc.3W=ih_iilnt1Z u)I:\u00ab:sV.co–rrect in “holding that a licence to
\n uend lViqz;or. an individual can be used
\nby thefi’r’rnlutnd\/or__lit’;=”partners when there being<\/p>\n
no le_gal’ trans fer of the licence ?\n<\/p>\n
l   ‘Whetherlllthe First Appellate Authority and<\/p>\n
it  0.  correct in holding that though
\n issued to an individual to mend in<\/p>\n
 J utilised by a third party firm, the same<\/p>\n
it v1;;l)uld not attract Section 23<\/a> of the Contract Act ?<\/p>\n
3) Whether the First Appellate Authority and–_<\/p>\n
Tribunal was correct in distinguishing<\/p>\n
judgment of the Hon’ble Supreme Court_r-e;o’o’rtefcl–.  9′ <\/p>\n
in 2002 (254) rm 230 (so) \u00abM Comr_niss_ioner.:’o_f 3<\/p>\n
Income Tax vs. Rangeelararji  Otheits ?;  <\/p>\n
4) Whether the First Appellate’ Aut’hott’iyl’and’j’\u00a7 .
\nTribunal was justfied in. holding tbat”At.h;e
\na valid firm despite mefgitt that it haasv-violated
\nthe provisions   :E::cise Act in
\nconducting liquor uitthouft fjayment of
\ntransfer  u2’i_thottt”havinglj’licence of its<\/p>\n
ownond   ‘act Qf thefinn being opposed<\/p>\n
1   S’?\n<\/p>\n
A  Whethe’r.:theticence issued to an individual<\/p>\n
A \u00ab , for v4endirtg.7liquor  be transferred as an asset
\n  the firrn under Section 2(2)<\/a> of the Partnership<\/p>\n
_Act*and ij’ so, would it not amount to violation of<\/p>\n
it  licence conditions, thus affecting the<\/p>\n
provisions of Section 23<\/a> of the Indian Contract<\/p>\n
1′ ,. lA_ct V?”\n<\/p>\n
\n
4. Learned Counsel for the Revenue assailingp the
\nimpugned order passed by the Tribunal contendedV..t.h’at’:
\nunder the Karnataka Excise Act, a liquor”
\ntransferred with the permission ;’3:fmVU’l’3 p_
\nadmittedly in this case, no such is
\ncould not have carried on liquorc:’p:b1isine.ss_  of the
\nlicence which stood in the na1r1eVp_:’of “-one of “they partners.
\nSecondly, he contended thlatain laid down by the
\nApex Court, a partner  ‘transfer the licence
\nstanding in  t.l_i.eD’1a.anie  ltvhelllpartnership firm, on<\/p>\n
the basis of whiich the.partnership firm carries on the business
\nin liquor, which is eleariyuproliiibited. A contract entered into in<\/p>\n
this regard isuuhipt 133.?’ Section 23<\/a> of the Contract Act as it is<\/p>\n
 ‘opposed totheppublicvlllpolicy as well as the express provision in<\/p>\n
th”eVstatrL!,t”e\u00bb…r_pd in ‘those Circumstances, the Assessing Officer was<\/p>\n
justified in .disvalllouring the deduction to the \ufb01rm wherein the<\/p>\n
 ‘salary paid’i~to the partners and the interest paid are treated as<\/p>\n
   expenditure and given the benefit. Therefore, he<\/p>\n
RX”\n<\/p>\n
\n
submits that the order passed by the Tribunal as well as the<\/p>\n
appellate authority is liable to the set aside.<\/p>\n
5. Per contra, the learned Counsel
\nassessee submitted that in the instant case. _ti1cr.e:  tranisier
\nof licence. The partnership firm  liquor l’
\nbusiness. After the firm came into_V:e’xistence;_; carry on
\nbusiness, it had to obtain  itiiwas agreed
\nbetween the partners  obtained either in
\nthe name of the firm or   o–f~th’e.:’pbartners. If obtained<\/p>\n
in the name of Vth.e\u00abi.p4artners;–.itwould be an asset of the firm. In
\nthose circurnstances; licence was applied in the name of<\/p>\n
the partner. the \ufb01rs paid out of the partnership firm and<\/p>\n
 it stood in the name of the partner. it was the<\/p>\n
VAi’assetVplAovfT’:thve partnership firm and there was no transfer of<\/p>\n
licence   partner to the firm involved in this case. The<\/p>\n
 ‘  “judgn1entt’relied on are not attracted to the facts of this case and<\/p>\n
   the appellate authority as well as the Tribunal held that<\/p>\n
it\/r<\/p>\n
the firm is entitieci to the benefit of deduction. ‘Fh~e”refore’.,he
\nsubmits that no case for interference is made out,_.”*’ <\/p>\n
6. The Apex Court in the  of, <\/p>\n
JAISWAL Vs. CIT, has held as arider:\n<\/p>\n
” A iicensee coald.. nofihlbelei  to  in
\nstrangers into the  :I,’I:)hf’i1fA’c’,l1\ufb011;i._?OltlCi mean
\nthat instead licensee  on the
\nbusine\u00a7ss,\ufb01;ii’_Vivoillci be  by others a
\n V _ R” V” i not  it ieonoiueitget’ V to effective
\n l  excise law and
\n:’:__conset;;ViteI1tlg;j”riehteterioiisl to public interest. It is
\nfor this my “that transfer or sab–letiing of
\n_ license  prohibited by several State
\nexcise enaetrrients. It, therefore, follows that any
\n where under the license is transferred,
\n  a partnership is entered into with
\n to the privilege business under the said
\n contrary to the prohibition Contained in<\/p>\n
the relevant excise enactment’, is an agreement<\/p>\n
V H prohibited by law. ”\n<\/p>\n
\n
Again the Supreme Court in the Case of CIT Vs. <\/p>\n
PAL CHAND AND CO., held that the liquor 1aceA1a3se\u00e9A:’1;:’g3\u00a3’ <\/p>\n
enter into a partnership without p1’tor_permiss_\u00a3o191.””rid  _ .g
\nAgain in the case of CIT Vs. DEGAON<\/p>\n
 SHNA AND CO., the Apex chm-f’1:as heicl  <\/p>\n
” In view of the clew\ufb01raaiiigs of ‘recorded
\nby the Tribunal;   .no–..doubtu’t’hat the
\nsubsparmershipslfonrted.  partners of
\nthe main’–p_artners’i”ti;:\u00a7”: u)hi_ch_  lessees, with<\/p>\n
some   to finance the business of a<\/p>\n
partnerV’~’oj7._ ‘matn.g_firr:1 doing abkart business
\nand  and losses accrued to or
\nreceived   the main firm, were not in<\/p>\n
i it :.>:o1atzc$h~ ofsechon 14 of the Abkart act. For this
\n theremts no basis to hold that the sub-<\/p>\n
”  l.  were in violation of Section 14<\/a> of the
\n and, therefore, illegal. The Tribunal
\n right in holding that in the facts and<\/p>\n
H \u00bbci:’rcumstances of the case, the assessee sub-<\/p>\n
partnerships being found to be genuine were<\/p>\n
bl\/.\n<\/p>\n
\n
entitled to be registered under the <\/p>\n
Act.\n<\/p>\n
7. The Apex Court had
\nsaid question in the ease of
\nPATIALA Vs. RANGILA RAM  in l_(l\u00e95<i3 ITR 230
\n(SC). In the said Case,  doxishrnhlthe law as<\/p>\n
under:<\/p>\n
\n”  principle,  to us, is that<\/p>\n
the        are: commercial. No
\n_Oine_ ;,:_ ll  without express
\n pef’7Al1:9’s.ior1,_l:’It is,only the licensee who is granted
\nsueh “he.~~enters into a partnership to
\ndebit.’ liduolr,’._vdll.._l~~the other partners would, as<\/p>\n
l ‘V partners-,  be dealing in liquor and holding the
\n 5\u00bb-sarrtes Thiswlwould be contrary to the basic<\/p>\n
  _ “and illegal.”\n<\/p>\n
.8.  \u00bb._’ T’i1″e1’efo1’e, ultimately it is the intention of the<\/p>\n
 as” gathered from the facts of the case which would<\/p>\n
l.l_\u00abi&detvelrn1’ine the eligibility for deduction. No person can carry on<\/p>\n
it,<\/p>\n
liquor business without a licence or permission. Such;
\ngranted is not transferable. Even if transferable’;
\nsubject to conditions. A partnershipifirrnto it
\nneeds a licence or perrnision
\nExcise Act<\/a>. if an individual Viransfersfhe to
\npartnership firm, it has to    law.\n<\/p>\n
Otherwise the transfer  __Section 23<\/a> of the
\nindian Contract Act<\/a>, and  a ‘partnership \ufb01rm
\nchooses to obtain  in the ofpne of its partner and
\nthe licence ip\u00e9r\u00e9ated as the partnership
\nasset expresslvx even before acquiring
\nsuch licneiggand  \ufb01rm pays the fee for obtaining<\/p>\n
such licence, the..sAaid”‘licence granted is a partnership asset and<\/p>\n
 .is=noV’t*thelpersonal property of such partner. No transfer is<\/p>\n
i’nybJ_x_;ed- =s_u’ch=aftransaction. It is not a case of a person who<\/p>\n
has obtained Zaglirliuor licence is inducted into a partnership as a<\/p>\n
dz”-‘..__partner,” .vvl1o brings in the said licence as his capital<\/p>\n
  coritiribtttion and makes available the licence to the partnership<\/p>\n
  to carry on liquor business and thus circumvent the law<\/p>\n
 [Licence ..{General Conditions) Rules 1967, reads as under:<\/p>\n
12<\/span><\/p>\n
prohibiting transfer of such licence. Thus the <\/p>\n
should acquire the licence to carry on liquor __i;i.1siness~–eii*i-.–.Taab<\/p>\n
manner known to law to be eligiblefQf__C1ec13;1ctionsund\u00e9cr the <\/p>\n
heading business expenditure 1JI1Cl(31:’.:4S\u20ac3f’.3’l.if_1:[1  ‘oflthleliilnconie<\/p>\n
Tax Act<\/a>. 1961. V   V ‘_\n<\/p>\n
9. It is not in dispute thiunder the Karnataka Excise<\/p>\n
Act, Section 15<\/a> deals witl1._i:he sal’eo_f’ei\u00e9cisable\u00ab ‘articles without<\/p>\n
licence is prohibited.\n<\/p>\n
   ‘cf ‘-excisabie articles without<\/p>\n
Iicence.. ‘ ‘<\/p>\n
}. ir1toitttjcin.\u00a3..’ishall be sold except under
\n  the duthiorityiand subject to the terms and
\n congiitionsvllllllof a licence granted in that<\/p>\n
The  rule found in 1703) of the Karnataka Excise<\/p>\n
I3<\/p>\n
” I 7MB. Transfer of licence in other cases.– U)\u00bb<\/p>\n
Notwithstanding anything contained in -1- <\/p>\n
2, licences issued, —\n<\/p>\n
(i) for sale of Indianiziiquor
\narrack) or Foreign Liquor  in  No. R’
\nCLAI (Wholesale licen_ce)… or  {retail
\nlicenses) or CL–7 (Hotel”‘and_VBoarding’ “Rouse
\nLicenses} or  roolnli (Bar)
\nLicence under {Sale of
\nIndian and Foreign. Liquoifsj  I 968; or<\/p>\n
{ii}   of:Beer_”u.nder—-the Karnataka<\/p>\n
 ‘Q:fl”R,_l’_ghi of Retail Vend of Beer)<\/p>\n
-K’-.Rules. —   R’<\/p>\n
  Commissioner may on an<\/p>\n
 tA.applicaiion by the licensee and subject to<\/p>\n
* ;,,,”l4hai;rrri,ent vofwltransfer fee equivalent to the<\/p>\n
‘V=._annuai–.licence fee speci\ufb01ed in Rule 8 of the<\/p>\n
  Excise [Sale of Indian and Foreign
\n Liquors) Rules, 1968 or Rule 5 of the
\n” Kamaiaka Excise {Lease of Right of Retail<\/p>\n
Vend of Beer, Rules, 1976, as the case mag<\/p>\n
14<\/span><\/p>\n
be, and with the prior approval of the Excise’
\nCommissioner, transfer such licence in_  ‘7’
\nof any person named by such licence,  .
\nperson is eligible for grant; ofa .li_cence\u00ab
\nthe Karnataka Excise ‘lorlldii”\u00bb’\u00bb’?”‘. it
\nmade thereunder. V _    .\n<\/p>\n
[2] Nothing in ‘fl1i,T$z”‘ful\u20ac’
\ntransfer of licence uni -“r  l ‘ E\n<\/p>\n
10. From the reading.   provisions it is
\nclear that no intoxicant   licence granted<\/p>\n
in that lbehe_1fA.xV’l’vfThel:’\u00abRules”-also.’ provide for transfer of such
\nlicence in favotir ‘per’son::named by such licensee, if such<\/p>\n
persorris _ eligible for  of licence, under the Karnataka<\/p>\n
   1965  Rules made therein. Therefore, there<\/p>\n
is no;-totaled’prohibition for transfer of the excise licence.<\/p>\n
11.}  ‘Corning to the facts of this case, the preamble to<\/p>\n
‘the Paittne.rship Deed dated 04″‘ November 1997 reads as<\/p>\n
-1 , ..  .. W\/\/1 _.\n<\/p>\n
\n
” WHEREAS, the above said parties of then”.   _
\n15* to 6*” parts along with Late
\nGANGABAI W\/o BABURAO PANALKAR.’  L”\n<\/p>\n
were carrying on business .of”Fareig7n  V<\/p>\n
in partnership till 2.1
\nname and style of M\/s   1 2
\nCC), at Jamkhandi  the  it<\/p>\n
deed dated 1.4.1992.   ‘ _V  <\/p>\n
AND  the \u00a7g;:i\u00a2:..,_s;\u00a7it.oanguba:
\nW\/ o Baburao   ..j:o.rr1lchandi
\nexpireciion.2.1:1.l99%.  V 2<\/p>\n
_ \u00ab _\u00bb the remaining<\/p>\n
‘pal-tners._ eoritintie\u00e9i “the said business as<\/p>\n
 in partnership with effect from<\/p>\n
 ‘3.V11.1’9\u00a3’7….._911 the following terms and
\nV o   renditions.”\n<\/p>\n
xclallu\u00e9sel3vvo\u00a3_’t\u00a31elV.P\u00e9irtnership Deed is of utmost importance. It<\/p>\n
reacisas u:1.der_; ‘T<\/p>\n
9.<\/p>\n
16<\/span><\/p>\n
” 3. THAT the business of partnership:
\nshall be that of dealing in foreign Liquor agici or.   . it
\nany other business that the partners.__j may it 1′ <\/p>\n
decidefrom time to time.”   .\n<\/p>\n
Clause 15 reads thus:\n<\/p>\n
” 15. THAT the licencex:’t0_ the said
\nbusiness may be\ufb02obtc-iinedeither’in the name
\nof any partner or in. to suit
\nthe conuedraienceiwofi  laujj-unu:ier.V’tohich such
\nlice’nc\u00a7e,    tw\ufb02owever, the<\/p>\n
licen_ce::_ _belorigs \ufb01rth only. =.<\/p>\n
12.  Frorn  recital in the partnership deed,<\/p>\n
It is clear that though Athisftnartnership came into existence on<\/p>\n
 1′ Ath 1’Jiover;–1ber,A 19957′ ‘fer\u00ab the reasons set out above, the business<\/p>\n
 =1i\u00abcjuor” xvasV”e3;r1iled on by the partnership from the year 1992.<\/p>\n
The said bu-sijneiss cannot be carried on without a licence being<\/p>\n
‘VVobtai’ned:’\u00ab\u00a7Nh1ch is to be renewed every year. it is In that<\/p>\n
A  Clause 15 provides for iicence which may be obtained<\/p>\n
 either in the name of any partner or in the name of the firm.<\/p>\n
E7<\/p>\n
However, the licence belongs to the firm only. It
\ndispute that after the formation of such  .
\nlicence was obtained in the name of one V\u00bb
\nTherefore the business of the
\nlicence. Therefore it is not a case  a
\nlicence and enters into a partnership firrn  contributes
\nlicence as his capital  aidlofllvwhich the
\npartnership carries on  the
\nprovisions of   is prohibited.\n<\/p>\n
Similarly, this  ‘the’ licence is transferred<\/p>\n
without    authorities, when the statute
\nprovides   This is a case where a
\nPa1″tne\u00a7r’:-yhip   on liquor business. On account<\/p>\n
 V. of the  one  partners, the partnership firm came to
\nreconstituted. Without a licence, they could<\/p>\n
not *–.have.~ ~coi.itinued to cany on the liquor business in<\/p>\n
 ‘  ‘partnership. Therefore, they agreed to apply for a licence either
\nit   ‘thelname of the firm or in the name of a partner making it<\/p>\n
 clear that even if the licence is obtained in the name of the<\/p>\n
18<\/span><\/p>\n
partner, the licence belongs to the partnership;
\nTherefore, it is not a case of transfer of licence to’ _
\nfirrn nor transfer of licence to a partnership withoiit:j*pgei’ri’iission ” V\u00bb<\/p>\n
of the authorities. The very licence is obtaiiiedghbyl the’<\/p>\n
the name of a partner, to carry -on theV_plartnee.rs’iiip_business_it’;<\/p>\n
which they were carrying on for  than   prior to the
\nconstitution of the    .A ” If it if<\/p>\n
13. ‘Hit?    is no intention on
\nbehalf of these  the law. It is not
\ncamou\ufb02a_gecl_’   Therefore the appellate
\nauthority Aaspwell  were justified in holding that
\nthe afoi’esaid  of Apex Court has no application to<\/p>\n
   It is a case of genuine partnership
\n  in liquor after obtaining licence in the
\nnarnelof v_ the partners, treating the said licence as<\/p>\n
 – ‘\u00ab\u00ab___lpartnersi1_i_p asset. No transfer is involved.<\/p>\n
14. In fact, the Apex Court in an unreported _\u00a7vuti~grrIent<\/p>\n
in the case of GRAND ENTERPRISES  {T  _<\/p>\n
COMMISSIONER OF INCOME TAX,  ~m.~ .:’jcj:Itz\u00a7iIf:Appeg:ciI-\u00ab .. <\/p>\n
No.1 31 711319\/01, disposed of on \ufb02it’  2r4)’Of\u00a3:;V–II,_’Vai\u00a3*\u00a7eI’<\/p>\n
referring to the aforesaid judgments ofV'”the”Ape:;”‘C’,o:.irt <\/p>\n
under:\n<\/p>\n
” A condition expressivgh the entry
\ninto agvptzrthership  a’\u00ab.iiee_tfiCVe_’ hjoider would
\nope:’afe if _Lvere:InOV fer in fact.
\nthat “ail:  Q) is a transfer,<\/p>\n
 th<'2F1tttVti\u00bb5?V  be;]7O;:t:Iaily established.
\n h 'In  the fact of mere
\nutiiisgdiionh  "the'..:iieence, nothing further has
\ni it been recorded  the High Court to come to the
\n. 7"eOntch,tIsion  there has been a transfer of
\n or of any rights thereunder to the
\n Neither the partnership deed
\n\u00bb__'nOr:'any other facts have been brought on
\n" record which would Show that the liquor
\nlicence and the privileges thereunder were<\/p>\n
brought in by the licence holder by way of his<\/p>\n
capital contribution to the partnership assets'."\u00bb.l
\nWe have already held that merely forTnin_g\u00a7'_:the–\u00abl —  \u00bb A4
\npartnership firm would not tantamo_ant\ufb02"to  L.
\ntransfer without something' mrnore'.  In
\nabsence Of an express sl"1\ufb014"$l5Tyll 15lr'OU'\u00a3\u00bb"'l\u00a7nll'
\nprohibiting the format1'o'n- of a par\ufb011ershtpl'l-Eaylial
\nlicence holder, the Hig'i1.V:lV.Court haoel
\naddressed itself to then-'qLiestto~n whether the
\nlicence formed of  property
\nor not, Unless the   answered
\nin the\u00a7.va_f,tr'inati\u00a7tA_)e,  Htgh_j–Couift, I could not
\ndraw' the   there  a transfer
\nof the  the condition<\/p>\n
 on    hadlloeen granted to the<\/p>\n
Therefore it clear .that"inl'the instant case there is no statutory<\/p>\n
'l V' "prQvilsiori..A'prohibitingthevformation of a partnership by a licence<\/p>\n
l"'ho'Id&er; did not contribute the licence as a captial<\/p>\n
c0n't1filjutior1't:tet::the partnership assets. On the contrary, the<\/p>\n
licence," from the inception, was treated as partnership asset by<\/p>\n
R.\n<\/p>\n
   words in the partnership deed.\n<\/p>\n
\n
2]<\/p>\n
15. In that View of the matter, the aforesaid  <\/p>\n
of the Apex Court have no appIicati_.on.._’ It inuu<\/p>\n
connection with express statutory “p1foV:’is1oVn on” the \\,?ar.ioi3.s<\/p>\n
State enactment. in question w1iiei–:._.proVisions ate n_0t…t.h.ere inf’<\/p>\n
the enactment in question In that_o_f the mattervvfwe do not
\nsee any merit in this appeal,’  the substantia}
\nquestions of iaw in faVou3″*v.ofoth\u20ac\u00a2and against the
\nrevenue. Accor\u00e9tin\u00e9ji\ufb01, tltc cipjaeqi Vistttiiisifitissed.<\/p>\n
= ‘\u00a2,”a*.W .’ judge<\/p>\n
 …..\n<\/p>\n
V\ufb01m ‘ksp\/nu. 2<\/p>\n","protected":false},"excerpt":{"rendered":"
Karnataka High Court The Commissioner Of Income Tax vs M\/S S B Pannalkar & Co on 2 November, 2010 Author: N.Kumar And Adi _ BIJAEPUR. V IN THE HIGH COURT or KARNATAKA cincvlfr’ AT GULBARGA __ Dated this the 2″” day of N0vembe_r.~ V pREsENf’ THE HON’BLE MR,JUsT1cr;”N.KUM4\u00e9R:v’: 1 THE HON’BLE MR.,.1JUsi*i\u00a2’E’ 1′ SiIBHASHV “I3.AD1 […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8,20],"tags":[],"class_list":["post-266814","post","type-post","status-publish","format-standard","hentry","category-high-court","category-karnataka-high-court"],"yoast_head":"\nThe Commissioner Of Income Tax vs M\/S S B Pannalkar & Co on 2 November, 2010 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/the-commissioner-of-income-tax-vs-ms-s-b-pannalkar-co-on-2-november-2010\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Commissioner Of Income Tax vs M\/S S B Pannalkar & Co on 2 November, 2010 - 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