Genuine partnership test upheld where the deed, read as a whole, showed shared profits, losses, and common business dealings.

The deed had to be construed as a whole to determine whether it created a genuine partnership for registration purposes. It showed that the firm would purchase the ice produced by the constituent parties, sell it at prices fixed by the firm, and distribute profits and losses in defined shares. The clause postponing payment until sale proceeds were realised did not negate purchase on credit; it only fixed the time for payment. Applying the statutory meaning of partnership under the Income-tax Act and the Partnership Act, the essential indicia of partnership were satisfied, and the arrangement qualified as a genuine partnership entitled to registration under section 26A.

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Issues: Whether the deed dated 20 August 1951 created a genuine partnership so as to entitle the assessee to registration under section 26A of the Indian Income-tax Act, 1922.

Analysis: The arrangement had to be construed from the terms of the deed as a whole. The deed provided for purchase by the firm of the ice manufactured by the constituent parties, sale of that ice by the firm at prices fixed by it, and distribution of profits and losses in defined shares. The clause postponing payment until sale proceeds were realised did not negate the element of purchase on credit; it only fixed the time for payment. Applying the statutory meaning of partnership under section 2(6B) of the Indian Income-tax Act, 1922 read with section 4 of the Indian Partnership Act, 1932, the essential indicia of partnership were satisfied.

Conclusion: The arrangement constituted a genuine partnership and the assessee was entitled to registration under section 26A.

Ratio Decidendi: The true nature of an arrangement must be determined from the deed as a whole, and where it evidences mutual agreement to share profits from a business carried on by or for all, with one entity purchasing goods from the parties and selling them as a common business, it amounts to a partnership for registration purposes.

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