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Issues:
1. Entitlement to registration under the Income-tax Act, 1961 for the assessment year 1973-74. Analysis: The judgment by the High Court of Madras involved a dispute regarding the entitlement of an assessee-firm to registration under the Income-tax Act, 1961 for the assessment year 1973-74. The firm, consisting of six partners engaged in the manufacture of huller screens, had obtained registration for previous assessment years. However, following the death of one partner in 1972, the Commissioner of Income-tax, Tamil Nadu-V, sought to cancel the registration on the grounds that no fresh partnership deed was executed after the partner's demise. The Commissioner contended that without a specified share allocation among the surviving partners, registration could not be granted. The Income-tax Appellate Tribunal, on the other hand, found that the partnership deed executed in 1969 clearly outlined the profit-sharing ratios among the partners and provided for the redistribution of the deceased partner's share to the remaining partners. The Tribunal held that the firm did not dissolve upon the partner's death as per the partnership agreement, and the surviving partners' shares were adequately specified. Consequently, the Tribunal ruled in favor of the assessee-firm's entitlement to registration, emphasizing that a reconstitution of the firm was unnecessary as the partnership deed sufficiently addressed the allocation of shares post the partner's demise. The High Court, in its analysis, concurred with the Tribunal's decision, highlighting that the clause in the partnership deed stating the deceased partner's share would belong to the remaining partners implied an equal distribution unless otherwise specified. Citing a precedent from the Bombay High Court, the judgment reinforced the principle that if the partnership deed clearly delineates the partners' shares, registration should be granted. The court rejected the Commissioner's argument that a fresh partnership deed was essential for registration, emphasizing that the existing deed adequately addressed the allocation of shares post the partner's death. Ultimately, the court ruled in favor of the assessee, holding that no reconstitution of the firm was required for registration, and the Tribunal's decision was upheld.
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