Major cannot be admitted to partnership benefits; firm based on such arrangement is ineligible for tax registration.

A major cannot be admitted merely to the benefits of a partnership under the Indian Partnership Act, 1932, because section 30 permits such an arrangement only for a minor with the consent of all partners. Section 6, read with Explanation 2, shows that receipt of profits alone does not make a person a partner, and the statutory scheme impliedly prohibits extending that status to a major. A firm constituted on that basis is not in conformity with the partnership law and therefore is not entitled to registration under the Income-tax Act.

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Issues: Whether a major could be admitted to the benefits of a partnership so as to entitle the firm to registration under the Income-tax Act.

Analysis: Under the Indian Partnership Act, 1932, section 30 expressly permits only a minor to be admitted to the benefits of partnership with the consent of all the partners. Section 6, read with Explanation 2, recognises that receipt of profits does not by itself make a person a partner. On that statutory scheme, admission of a major to the benefits of partnership is not contemplated and is impliedly prohibited. The mere absence of an express clause declaring such a partnership illegal does not validate a constitution that is contrary to the statutory framework governing partnership.

Conclusion: The firm was not entitled to registration, and the answer to the referred question was against the assessee and in favour of the Department.

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