1978 (7) TMI 142

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.... Balkrishna Agarwalla and Shrimati Ramkumari Devi Agarwalla as partners and admitting Jagadish Prasad Agarwalla, Sunilal Kumar Agarwalla, Ashok Kumar Agarwalla and Sushil Kumar Agarwalla, who were minors to the benefits of the partnership. Jagadish Prasad Agarwalla attained majority in Nov., 1973, and elected to become a partner of the firm. Consequently, a fresh partnership deed was executed on 1st Dec., 1973, with Balkrishna Agarwalla, Smt. Ramkumari Devi Agarwalla and Shri Jagadish Prasad Agarwalla as partners and admitting the three other minors mentioned above to the benefits of the partnership. This deed further stated tht it shall have effect on and from 1st day of April, 1973, the cover the financial year 1973-74 which is the previo....

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....the middle of the previous year. He was of the view that the sharing of the losses by the partner who was then a minor invalidated the document. he, therefore, refused to grant registration. 5. On appeal, the AAC accepted the contention of the assessee that since the accounts were drawn up only at the end of the year, the profit sharing ratio is applied only at the time of making up the accounts by which date the new partners were majors and could share the losses. He, therefore, directed the ITO to grant registration. 6. The Revenue has appealed and it was contended that the order of the AAC are erroneous and that he had approved a document by which a person who was a minor had been made a partner of a firm which was contrary to law.....

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....rson as a partner at a time when he was minor. This contention appears to proceed upon some misapprehension regarding the tenure of the agreement of partnership. No one can create a legal fiction by an agreement and hence there cannot be an agreement which had retrospective operation against realities. For example, a partnership deed cannot be deemed to have commenced from a date prior to the actual date on which the partners agreed to commence business or prior to the date on which the partners actually came together. But a document can be executed later conforming a factual or legal position which obtained earlier. On the other hand, the legal fictions can be created by legislation. In the instant case, s. 30(7) of the Indian Partnersh....