Genuine partnership requirement defeated where inconsistent deeds showed the alleged firm did not reflect the arrangement.

Registration of a firm can be refused where the partnership deed and surrounding accounts do not show a real and genuine partnership. The court examined the 1959 deed, which described the partners as coparceners and stated one capital figure, against a later 1962 deed said to be a rectification but retaining the same commencement date while showing a different capital. That inconsistency was material because it went to the origin and nature of the alleged partnership and indicated that the earlier instrument did not reflect the actual arrangement. The refusal of registration for the relevant assessment year was therefore justified.

---

---

Issues: Whether registration of the assessee-firm could be refused on the ground that no genuine firm came into existence under the partnership deed dated 23 February 1959.

Analysis: The application for registration had to be tested on the basis of the instrument of partnership and the surrounding facts shown by the accounts. The deed of 1959 described the partners as coparceners and stated a capital of Rs. 1,20,000, while the later deed of 1962, relied on as a rectification, retained the same commencement date but declared a different capital. The divergence was treated as material because it went to the origin and nature of the alleged partnership and showed that the earlier document did not reflect the actual arrangement. On those facts, the Tribunal was entitled to hold that the 1959 deed did not evidence a real and genuine partnership.

Conclusion: The refusal of registration for the assessment year 1961-62 was justified, and the question was answered in favour of the Revenue.

---