Partnership registration failed where the deed showed an existing firm as partner in substance, despite signature by an individual representative.

A partnership deed must be read as a whole to identify the contracting parties for registration purposes. Where an individual signs for an existing firm, but the deed expressly allocates profit and loss shares to that firm, the firm is treated as the partner in substance and not the individual in a personal capacity. On that footing, a partnership described as between a firm and other individuals does not satisfy the requirements for registration when the deed itself shows the firm as the contracting partner and the mutual rights and liabilities among all partners are not properly established. Registration was therefore refused in law.

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Issues: Whether a firm was entitled to registration where the partnership deed showed one of the partners as an existing firm represented by an individual signatory.

Analysis: The deed had to be read as a whole to determine the real partner. Although an individual signed for the existing firm, clause 7 expressly allotted a share of profit and loss to the firm itself. In such a situation, the individual did not contract in his personal capacity for the assessee-firm, and the arrangement made the firm a partner in substance. A partnership cannot validly be treated as one between a firm and other individuals for the purpose of registration when the deed itself shows the firm as the contracting partner. The earlier principles governing representative capacity and the absence of mutual rights and liabilities among all the partners supported refusal of registration.

Conclusion: The assessee was not entitled to registration and the refusal was in law.

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