9911796707
TMI Blog1991 (2) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... facts are that the Income-tax Officer, vide his order dated December 22, 1973, under section 185 of the Income-tax Act, 1961, has refused registration, inter alia, with the following observations : " . . . Therefore, this clause cannot, by any stretch of imagination, be taken for the allocation clause. It merely records the intention of the partners to continue the business. The fact remains that the partnership deed is not particular on the question of allocation of profit or loss. The other arguments of the authorised representative boil down to the point that, constructively, with reference to surrounding facts, viz., previous partnership was an equal partnership and that the accounts show equal allocation of the profits amongst the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade on December 26, 1973, after the close of the relevant accounting year in question which specified the shares of the continuing partners. The question is whether in the absence of the individual shares of the partners being specified in the instrument, the deed of rectification can be taken to be effective for the purpose of registration under the Income-tax Act, 1961. A similar question came up for consideration before the Supreme Court in N. T. Patel and Co. v. CIT [1961] 42 ITR 224. In that case, an application was made under section 26A of the Income-tax Act, 1961, for the registration of a firm (for the assessment year 1955-56) constituted by a deed of partnership dated March 29, 1954. In the course of the assessment proceedings, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partners which the partners would not be entitled to but for section 26A. This right can be claimed only in accordance with the statute which confers it and a person seeking relief under that section must bring himself strictly within the terms of that section. This right is strictly regulated by the terms of that statute. Unless the instrument of partnership specified the individual shares of the partners, the instrument of partnership would not conform to the requirements of section 26A. In that case, so also in the case before us, a deed of rectification specifying the individual shares of the partners was executed after the close of the accounting year. Even then, the registration was refused to the firm. Mr. Poddar has also drawn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppearing in the instant case. We may add that, by the judgment dated February 24, 1981, the application made by the assessee under section 256(2) was rejected by Division Bench of this court. There, the Division Bench observed as follows "Learned advocate for the assessee stressed that on the surrounding circumstances-read along with the deed of dissolution, a construction should be made that the shares were specified. It appears that, in the instant case, the deed dated February 23, 1973, itself is a deed of dissolution and the preamble mentioned 'whereas the parties hereto of this deed of dissolution of partnership' and 'whereas the first party and Shri Amal Kumar Banerjee and Shri Ashoke Kumar Banerjee entered into a deed of agreemen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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