A partner can bring his immovable property into the stock or capital of the firm without a registered instrument.

Chandrashekhar, J.

1. At the instance of the assessee, the Income-tax Appellate Tribunal (hereinafter referred to as "the Tribunal") has referred to this court the following two questions under Sub-section (1) of Section 27 of the Wealth-tax Act, 1957:

"(1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the business asset consisting of the Grand Hotel building could be transferred to the partnership only by a registered deed, and in the absence of such a deed the building remained the individual property of Shri K. D. Pandey ?

(2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the entire value of the building was assessable in the hands of the assessee, individual ?"

2. The facts of the case have been set out in the statement of the case and it is unnecessary to repeat them here. Suffice it to say that the assessee who was running a hotel as its sole proprietor entered into a partnership with his son under a deed of partnership dated April 16, 1966, to run the same business. In that firm his share of profits and losses was 75 per cent. In the wealth-tax assessment for the year 1967-68 he claimed that he had transferred his entire business assets including the hotel building which belonged to him individually to the newly formed partnership, that the building became the property of the firm and that he had only 75 per cent. share in the building. The Wealth-tax Officer included the entire value of the building in the assessee's net wealth.

3. In the appeal preferred by the assessee, the Appellate Assistant Commissioner upheld his claim that the building had become the property of the partnership firm and that only his share of 75 per cent. of the value of the building should be included in his net wealth.

4. In the further appeal by the revenue, the Tribunal held there was no effective transfer of the building from the assessee to the partnership firm, that he continued to be the owner of the entire building and that the entire value thereof should be included in his net wealth. Section 14 of the Indian Partnership Act, 1932, reads:

"14. Subject to contract between the partners, the property of the firm includes all property and rights and interests in property originally brought into the stock of the firm, or acquired, by purchase or otherwise, by or for the firm, or for the purpose and in the course of the business of the firm, and includes also the goodwill of the business.

Unless the contrary intention appears, property and rights and interests in property acquired with money belonging to the firm are deemed to have been acquired for the firm."

5. The principal question that arises for determination in this reference is whether the assessee brought the building in which he was carrying on the hotel business, into the stock or capital of the firm.

6. Section 5 of the Transfer of Property Act, 1882, defines transfer of property as an act by which a living person conveys property, in present or in future, to one or more other living persons, or to himself and one or more other living persons. Thus, a person can transfer a property from himself to himself and one or more other living persons. Section 17(1)(b) of the Registration Act, 1908, provides, inter alia, that a non-testamentary instrument which purports or operates to create, declare, assign, limit or extinguish any right, title or interest of the value of one hundred rupees and upwards, to or in immovable property, shall be registered.

7. If the hotel building was transferred by the assessee to the partnership firm under an instrument of conveyance, such instrument should have been registered under the Registration Act in order to constitute a valid transfer. It is undisputed that in the present case there was no instrument under which the assessee purported to convey the hotel building to the partnership firm. But the question is whether a partner can bring