Statutory meaning of partnership bars a firm or Hindu joint family from being a valid partner in another firm.

The statutory meaning of "partnership" and "firm" under the Income-tax Act, 1922 was read with Section 239 of the Indian Contract Act, 1872, so the general definition of "person" in the General Clauses Act, 1897 could not be applied where inconsistent with context. On that construction, a firm could not legally be a partner in another firm, and the same reasoning applied to a Hindu joint family. No valid partnership could therefore be constituted between the firm and the Hindu joint family, and the referred question was answered in the negative.

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Issues: Whether an association between a Hindu joint family and another firm could constitute a valid partnership or firm in law under the relevant statutory provisions.

Analysis: The reference turned on the meaning of "partnership" and "firm" under the Income-tax Act, 1922 and the Indian Contract Act, 1872. The Court held that the statutory definition of "firm" and "partner" in the Income-tax Act imported the meaning from Section 239 of the Indian Contract Act, 1872. It further held that the general definition of "person" in the General Clauses Act, 1897 could not be applied where repugnant to the subject or context. On that construction, a firm could not legally be a partner in another firm, and the same reasoning applied where the supposed partner was a Hindu joint family.

Conclusion: No valid partnership could be constituted between the Bombay firm and the Hindu joint family in Muttra, and the answer to the referred question was in the negative.

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