TMI Blog1956 (2) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... tary concern. Dwarkadas acquired the rights of the selling agency of the Seksaria Cotton Mills on 12th, February 1946, and although the instrument which gave him this right was dated 12th February, 1946, the right was to commence from 1st January, 1946. On 27th March, 1946, an instrument of partnership was executed by four persons who agreed to carry on the business of the selling agency in partnership. One was Dwarkadas Khetan. There were two other major partners and the third was a minor Kantilal Keshardeo. The partnership agreement was executed both by the minor himself and also by his natural guardian, his father, on behalf of the minor, and the assessee firm which was constituted under this partnership deed applied for registration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ible to accept that contention. The proper view and the only legal view was that on a proper construction of this partnership deed the three major signatories became the partners and the minor signatory was admitted to the benefits of the partnership. Under the Income-tax Act itself the expression Partner includes a minor who is admitted to the benefits of the partnership and this is for obvious reasons because when a partnership is registered to the benefits of which a minor has been admitted, his share is considered as a share for the purposes of allocation of profit, and therefore no difficulty whatever could be experienced in registering this instrument of partnership under section 26A. The Advocate-General has relied on a decis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtnership consisting of adult partners excluding the minor who must be looked upon as having been only admitted to the benefits of the partnership. The second contention, in our opinion, also must be answered against the view taken by the Tribunal. This partnership deed, although it is dated 27th March, 1946, recites in clause 3: The partnership shall be deemed to have commenced from 1st January, 1946, and shall continue until the partners hereto decide unanimously in writing to terminate the same. The view taken by the Tribunal is that inasmuch as the partnership deed is dated 27th March, 1946, the partnership which commenced on 1st January, 1946, prior to the execution of the deed cannot be registered under section 26A. Befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... instrument of partnership. What must not be overlooked is that what is sought to be registered is not the instrument of partnership but the firm, and the firm is seeking registration for the purpose of certain indulgence which is shown to a registered firm and if the firm can satisfy the authorities that it was carrying on business during the accounting period, then the fact the partnership deed was executed subsequently can have no bearing on the question of registration. If this be the provision of law, then it is not open to add any further conditions to section 26A which the Legislature itself has not imposed. In our opinion, it would be totally opposed to any plain construction of section 26A to suggest that only that firm can be re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egislature. It would not be a correct canon of construction to substitute for the expression under an instrument the expression by an instrument and then construe the section as it the latter expression had been used by the Legislature. The learned Chief Justice also takes the view that when a partnership deed is executed the partnership can only come into existence in future and that the partnership deed cannot record the fact of a preexisting partnership. Again, with very great respect, it is the knowledge of all Judges who have had anything to do with commercial litigation in the City of Bombay that a large number of partnership deeds record the fact of an already existing partnership. In commercial towns like Bombay people start ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indicated by us, with very great respect, we are unable to accept the view of the law taken by those learned Judges. The result therefore is that we answer question (1) in the affirmative: the instrument of partnership created a valid partnership between the three adult partners, Kantilal having been admitted to the benefits of the partnership. The answer to question (2) is that the firm must be registered with effect from the date when it came into existence, not by reason of the date of the instrument but in point of fact. If it came into existence on 1st January, 1946, then it should be registered from that date. If it came into existence at a later date, then from such date. The Commissioner to pay the costs. Reference answere ..... X X X X Extracts X X X X X X X X Extracts X X X X
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