Partnership registration depends on the deed's clear terms, not extraneous family arrangements or profit-sharing behind the deed.

Renewal of registration could not be refused where the partnership deed clearly admitted the named partner in his individual capacity. The fact that he may have shared profits with members of his Hindu undivided family, or that the department and the other partner knew of that arrangement, did not permit the authorities to go behind the deed and treat the family as the partner for registration purposes. Subsequent family arrangements and a later deed did not alter the original legal relationship created by the 30 May 1958 partnership deed, so the refusal of renewal was invalid.

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Issues: Whether renewal of registration of the assessee-firm could be refused on the ground that one partner was, in substance, representing a Hindu undivided family and not acting in his individual capacity under the partnership deed.

Analysis: The partnership deed of 30 May 1958 showed only two partners and, on its face, admitted the named partner in his individual capacity. The mere fact that he may have shared his profits with members of his family, or that the department and the other partner knew of that arrangement, did not alter the legal relationship created by the deed. In determining who the partners are for registration purposes, the authorities cannot go behind clear and unequivocal terms of the deed and substitute extraneous circumstances to hold that the real partner was the Hindu undivided family. The subsequent family arrangement and later partnership deed did not modify the assessee-firm's original partnership deed.

Conclusion: Renewal of registration could not be refused on the footing that the real partner was the Hindu undivided family. The refusal was invalid and the assessee succeeded.

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