Partnership registration fails where one partner has exclusive control and others lack agency to bind the firm.

A deed of arrangement must satisfy the core partnership requirements of mutual profit and loss sharing and authority for each partner to act as agent of all. Here, the instrument vested full control and final decision-making in one partner, and it prohibited the others from carrying on business, raising loans, or pledging the firm's interest without his authority. On that construction, the other persons could not act as agents of all the partners, so the arrangement did not constitute a valid partnership for income-tax registration. The firm was therefore not entitled to registration under section 26A of the Indian Income-tax Act, 1922, and the answer was against the assessee.

---

---

Issues: Whether the deed of arrangement satisfied the essential requirements of a partnership so as to entitle the firm to registration for income-tax purposes.

Analysis: The governing test was whether the parties had agreed to share profits and losses and whether each partner was entitled to act as agent of all. The deed vested full control and management in one partner, restrained the other partners from taking business, raising loans, or pledging the firm's interest without that partner's authority, and made his decision final and binding on the others. On a true construction of the instrument, the other persons could not act as agents of all the partners, and the arrangement therefore failed to satisfy the statutory concept of partnership. The cited authorities that upheld partnership on different facts did not assist the assessee, while the authority denying partnership on similarly restrictive terms supported the revenue.

Conclusion: The firm was not entitled to registration under section 26A of the Indian Income-tax Act, 1922, and the answer was against the assessee and in favour of the revenue.

---