Partnership registration requires an executed instrument in the relevant year; an undated draft deed is insufficient.

A firm seeking registration under section 26A of the Indian Income-tax Act, 1922 had to show that it was constituted under an instrument of partnership specifying the partners' individual shares, and that the relevant instrument existed in the accounting year. An undated, unsigned draft deed was insufficient because it did not amount to an executed legal instrument creating or recording enforceable partnership rights and liabilities. Later documents could not cure the defect because they were brought into existence only after the relevant accounting year. Registration was therefore rightly refused.

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Issues: Whether the assessee's firm was constituted under an instrument of partnership within the meaning of section 26A of the Indian Income-tax Act, 1922, so as to qualify for registration.

Analysis: For registration under section 26A, the firm had to be constituted under an instrument of partnership specifying the individual shares of the partners, and the instrument or documents forming it had to exist in the relevant accounting year. The only document shown to have been in existence during that year was an undated and unsigned draft deed, which by itself did not amount to a formal legal instrument creating or recording the rights and liabilities of specified partners. The later documents relied upon could not be treated as part of the instrument because they came into existence after the relevant accounting year. A mere draft, unsupported by execution and not shown to constitute the partnership instrument itself, was insufficient to satisfy section 26A.

Conclusion: The firm was not constituted under an instrument of partnership within section 26A, and registration was rightly refused.

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