CHANDRAKANT MANILAL SHAH AND ANR. vs COMMISSIONER OF INCOME TAX, BOMBAY-II

The Supreme Court held that a partnership can be valid even if one coparcener contributes only skill and labour without any cash assets, as per Section 26A and 66(1) of the Indian Income Tax Act, 1922, and Section 4(57) of the Indian Partnership Act, 1932. The Court emphasized that contributions of skill and labour are valid forms of property, thus fulfilling the requirements for a partnership. The appeal was allowed, overturning the lower courts' decisions that had dismissed the partnership's validity.