Law:

Section:

section 184 of the income-tax act, 1961-registration of firms-application for registration-minor admitted to the benefits of partnership allocated share of loss in the books of one of the several businesses of assessee-firm-profits in other businesses resulting in overall profit of the assessee-whether registration could be refused-held, no partnership deed signed by father of the minor but not specifically on behalf of the minor-whether partnership deed was valid-held, yes Facts The assessee-firm was carrying on three different businesses and was maintaining separate books for each of the businesses. In the assessment year 1967-68, there was a loss in one of the businesses and profit in the other two, but there was an overall profit to the assessee-firm. In the books of the business which suffered loss, a minor, who was admitted to the benefits of the partnership, was allocated his share of the loss. The ITO refused registration after rejecting assessee's contention that there was overall profit and that no loss was allocated to the minor on the whole. The AAC confirmed the ITO's order. The Tribunal, however, accepted the assessee's claim for registration holding that no loss was allocated to the minor on the whole. Before the Tribunal, the revenue challenged the partnership deed, as the same was not signed on behalf of the minor. The Tribunal, however, held that since the deed was signed by the father of the minor who was a natural guardian, he should be deemed to have signed the same on behalf of the minor. On reference : Held 1. The different businesses of the assessee had no separate identity and the shares of the partners were to be determined after taking into account the result of all the businesses together. Since the overall result was a profit, assessee was entitled to registration. 2. When the minor's father, a natural guardian, signed the partnership deed, it should be deemed that he had signed the document on behalf of the minor and as such the partnership deed was valid. JUDGMENT Satish Chandra, C.J.-M/s. Sohan Lal & Sons, the assessee, is a partnership firm. It consisted of four major partners and Mahesh Kumar (minor) was admitted to its…

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