Partnership registration upheld where adult members formed a valid firm and a minor signatory did not invalidate the deed.

A family arrangement was treated as co-ownership and management, not a partnership, because it did not show an intention to constitute the parties as partners. The partnership deed was not invalid merely because one signatory, though described as a major, was in fact a minor; any invalidity as against the minor did not defeat the agreement between the adult members. On the facts, the adult members formed a valid partnership and the minor could be treated as admitted to the benefits of partnership for income-tax purposes. Subsequent release and ratification deeds were irrelevant because they were executed after the registration application. Registration under Section 26A was therefore allowed.

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Issues: Whether the assessee was entitled to registration as a firm under Section 26A of the Indian Income-tax Act on the basis of the family arrangement and partnership deed.

Analysis: The family arrangement was treated as a co-ownership and management arrangement and not as a partnership, since it did not show an intention to constitute the parties as partners. The partnership deed was not invalid merely because one signatory, though described as a major, was in fact a minor; the invalidity as against the minor did not destroy the agreement between the adult members. On the facts, the adult members formed a valid partnership and the minor could be regarded as admitted to the benefits of partnership for income-tax purposes. The later release and ratification deeds could not be taken into account because they were subsequent to the application for registration.

Conclusion: The assessee was entitled to registration of the firm under Section 26A, and the question was answered in the affirmative in favour of the assessee.

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