Partnership registration may rest on contemporaneous letters and documents when they clearly state partners' shares and terms.

For registration of a firm under the Income-tax Act, the partnership must be evidenced by an instrument specifying the partners' individual shares, but that instrument need not be confined to a single formal deed. Contemporaneous correspondence or multiple documents may together constitute the partnership instrument if they clearly record the terms of the continuing partnership. Here, the letter dated 2 December 1969 recorded the reduced number of partners and their revised profit-sharing ratios, so it could properly be treated as part of the fresh instrument of partnership. A separate formal deed was not necessary where the written record already satisfied the statutory requirement.

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Issues: Whether the correspondence dated 2 December 1969 between the two continuing partners could be treated as a fresh instrument of partnership for registration of the firm under the Income-tax Act, 1961.

Analysis: The relevant statutory scheme requires the firm to be evidenced by an instrument and the instrument must specify the individual shares of the partners. A partnership deed need not be confined to a single formal document if the terms of the partnership are clearly evidenced by a set of contemporaneous documents or correspondence that together constitute the instrument of partnership. On the facts, the letter dated 2 December 1969 recorded the reduced number of partners and their revised profit-sharing ratios, and there was no legal impediment to treating it as part of the partnership instrument. The contention that a fresh formal deed alone could satisfy the requirement was rejected.

Conclusion: The letter dated 2 December 1969 was rightly treated as a fresh instrument of partnership, and a further formal deed was not necessary for registration.

Ratio Decidendi: For registration of a firm, the partnership may be evidenced by one document or by several contemporaneous documents or letters taken together, provided they constitute a genuine instrument specifying the partners and their shares.

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