Partnership genuineness turns on profit-sharing and common business carrying on, not on every partner's direct management.

A partnership is genuine where the deed records an agreement to share profits of a business carried on by any partner on behalf of all. A false recital explaining why the arrangement was entered into does not, by itself, show that no partnership came into existence. Nor does one partner's non-participation in day-to-day management negate the partnership, because personal management by every partner is not required. On the record, there was no material showing that the business was not carried on on behalf of all the executants after the deed was executed, so the Tribunal's finding that the partnership was not genuine was unsupported by evidence and the issue was answered in favour of the assessee.

---

---

Issues: Whether there was evidence to support the Tribunal's finding that the partnership evidenced by the deed dated May 2, 1957 was not genuine.

Analysis: A partnership under the law depends on an agreement to share the profits of a business carried on by all or any of the partners acting for all. The deed of May 2, 1957 expressly recorded an agreement among the executants that the cinema business would be carried on as a partnership with specified profit-sharing shares. A false recital as to the reason for entering into the agreement, by itself, did not establish that no partnership in fact came into existence. Nor did the fact that one partner did not personally participate in the running of the business negate the partnership, since the legal test does not require every partner to manage the business in person. On the record, there was no material showing that the business was not being carried on on behalf of all the executants after the deed was executed.

Conclusion: The Tribunal's finding that the partnership was not genuine was unsupported by evidence, and the question was answered in the affirmative in favour of the assessee.

Ratio Decidendi: A partnership is genuine if the deed evidences an agreement to share profits of a business carried on by any partner on behalf of all, and a false recital or non-participation of one partner in management does not by itself prove that the partnership is a sham.

---