Law: Income Tax Act, 1961

Section: 185

Income-tax-Firm---Registration---Condition precedent ---Specification of shares of partners---Specification need not be in deed of partnership---Specification in application for registration would be sufficient---Minor admitted to benefits of partnership attaining majority and continuing as a partner---Share of erstwhile minor in losses specified in Form No. 111 A---Firm entitled to registration--- Indian Income Tax Act, 1961, S.185. The Supreme Court held in Progressive Financers v. CIT (1997) 224 ITR 595, that the Assessing Officer cannot reject an application for registration of a firm merely because in the deed of partnership the shares of' the partners are, not expressly specified, anti that even if the shares of the partners were not expressly specified in the instrument of partnership, if they could be ascertained by the Income-tax Officer from the application and required information supplied therewith, then the requirements of the law could be said to have been satisfied. Minor omissions in the document or the statement of the same in a separate document, of matters which could have been stated in the principal document are not factors which would deprive the firm of the benefit of registration. Wit is necessary to construe the documents and a reasonable construction permits an inference which would help to supply what had not been expressly stated in .the document, such an exercise is permissible, as where the share in the profits are mentioned and the share in the losses are not mentioned in the instrument of partnership. Also, if another document which is reliable and is capable of binding the firm and the partners, is to be found with declarations or statements, which construed alongwith the original document of partnership, would entitle the firm to registration, such registration is not to be denied only on the ground that all that is required to be stated has not been stated in a single document, namely, the deed of partnership: Held, that in the instant case, a partnership deed was drawn up in the year 1963. The firm had been registered. The registration had been continued from year to year. Even after one of the minors admitted to the benefits…

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