Gopalan Nambiyar, C.J.
1. M/s. Best Automobiles, the assessee in this case, was originally a firm constituted of two partners under a deed of partnership dated May 10, 1968. A change in the constitution of the firm took place by the admission of two minor partners to the partnership. This led to the execution of a new deed of partnership on April 1, 1972. The assessment year with which we are concerned is 1973-74, that is, after the execution of the new deed of partnership. The relevant clause in the deed of partnership is Clause 7, which reads :
'The minors as well as the partners shall be entitled to 1/4th share of the net profit or loss of the partnership : provided that the liability of the minors shall be limited, as contemplated in Section 30 of the Partnership Act, 1932. The share of profit due to the minors shall not be withdrawn tillthey attain majority and they will bear interest at 12% per annum.'
2. Clause 12 of the deed provided:
'In respect of matters not specifically provided in this agreement, the provisions of the Partnership Act shall prevail.'
3. The firm applied for registration under Section 184 of the I.T. Act, 1961, The ITO refused registration following the decision of this court in C.T. Palu & Sons v. CIT : 72ITR641(Ker) . He took the view that there was an omission to specify the shares in the losses of the firm. On appeal, the AAC held that it was clear that the shares of the partners including the minors were specified by Clause 7 of the deed in proportion to the profits and the losses of the firm. He allowed the appeal and directed that registration be granted to the firm. The said decision was confirmed on further appeal by the Income-tax Appellate Tribunal. At the instance of the revenue, the Tribunal referred the following question of law for the opinion of this court under Section 256(1) of the Act;
'Whether the assessee firm is for assessment year 1973-74 entitled to registration on the basis of the partnership deed annexed, marked annexure 'A', under the Income-tax Act, 1961 '
4. Section 184 of the I.T. Act, in so far as it is relevant, reads :
'184. Application for registration.--(1) An application for registration of a firm for the purposes of this Act may be made to the Income-tax Officer on behalf of any firm, if--
(i) the partnership is evidenced by an instrument; and (ii) the individual shares of the partners are specified in that instrument.
(2) Such application may, subject to the provisions of this section, be made either during the existence of the firm or after its dissolution...'
5. The conditions necessary for obtaining registration of the firm as posited by Section 184(1) of the Act are:
(1) that the partnership must be evidenced by an instrument; and (2) that the individual shares of the partners must be specified in that instrument.
6. The question for consideration would be whether these tests stand satisfied in the instant case. It has been ruled that as, registration of the firm confers certain benefits on the firm in question, strict compliance with the provisions of the Act regarding registration is necessary. In Sri Ramamohan Motor Service v. CIT : 89ITR274(SC) , a partnership was executed relating to a firm consisting of five partners. The fifth partner was a minor and the deed showed that he was a party represented by his father. The profit or loss of the business were to be divided between the partners in equal shares. Subsequent to the formation of the partnership, an application for registration under Section 26A of the Indian I.T. Act, 1922, was made. The four adult partners by their letter informed the Registrar of Firms that the minor was admitted to the benefits of the partnershipwith the consent of all the partners and that he had nothing to do with the losses, but there was nothing on record to show that the letter was sent to the ITO. The Commissioner and the Tribunal concurred in holding that the partnership was invalid. The said decision was upheld, on reference, by the High Court. On appeal, the Supreme Court expounded the principles in regard to the granting of registration to a firm. Reference was made to the earlier decision in Rao Bahadur Ravulu Subba Rao v. CIT : 30ITR163(SC) and the following passage from that judgment was quoted (p. 172):
'Thus, if a firm is registered, it ceases to be a unit for purposes of taxation and the profits earned by it are taken, in accordance with the general law of partnership, to have been earned by the individual partners according to their shares, and they are taxed on their individual income including their share of profits. The advantages of this provision are obvious. The rate of tax chargeable will not be on the higher scale provided for incomes on the higher levels but on the lower one at which the income of the individual partner is chargeable. Thus, registration confers on the partners a benefit to which they would not have been entitled but for Section 26A, and such a right being a creature of the statute, can be claimed only in accordance with the statute, which confers it and a person who seeks relief under Section 26A must bring himself strictly within its terms before he can claim the benefit of it. In other words, the right is regulated solely by the terms of the statute, and it would be repugnant to the character of such a right to add to those terms by reference to other laws. The statute must be construed as exhaustive in regard to the conditions under which it can be claimed.'
7. After the above quotation, the Supreme Court proceeded to state that the decision was authority for the proposition that a firm which claimed the benefit of Section 26A must strictly comply with the requirements of the section ; and, in view of Sub-section (2) of the section, it should also comply with the requirements of the relevant rules. The contention that substantial compliance with the requirement of the section would suffice, was not accepted by the Supreme Court. In Mandyala Govindu & Co. v. CIT : 102ITR1(SC) , the Supreme Court had again occasion to expound the law in regard to registration of a firm under Section 26A of the Indian Income-tax Act, 1922. The positron disclosed in that case was that N, V and S were partners of a firm having, respectively, share from the profits, of 31 per cent., 23 per cent. and 23 per cent.; and J was a partner admitted to the benefits of the partnership with a share of 23 per cent. in the profits. There was no clause in the deed of partnership specifying the proportion in which the three adult partners were to share the losses. Clause 9 of the deed provided that the partners were bound to act according to the stipulations in the deed andaccording to the provisions of the Indian Partnership Act, 1932. On these provisions, the question was whether the firm was entitled to registration. On behalf of the firm, the contention was that it was sufficient if the proportion in which the losses were shared was otherwise ascertaintable, and Clause 9 would make this possible, as it impliedly brought into operation Section 13(b) of the Partnership Act. It was ruled that before allowing the application for registration, the ITO must be in a position at least to ascertain the shares of the partners in the losses, even if the section did not require the shares in the losses to be specified in the instrument of partnership. It was further ruled that as the partners had unequal shares, there could be no presumption that the losses were to be shared equally, having regard to Section 13(b) of the Partnership Act. That section had no application. The rule that where the profits were unequal the losses must be shared in the same proportion, also did not apply, because even if the adult partners were to bear the losses in proportion to their respective shares in the profits, there was no way to ascertain how the amount of loss in the minor's share was to be apportioned. In the result, it was ruled that the firm was not entitled to registration. Certain observations made by the Supreme Court are significant. The court observed (p. 4) :
'The appellant contends that Section 26A does not require specification of the shares in losses in the instrument of partnership and it is sufficient if the proportion in which the losses are to be shared is otherwise ascertainable, and that, assuming the section did so require, Clause 9 of the instrument satisfies that requirement.
The contention that Clause 9 specifies the respective shares of the partners in the losses is obviously untenable. This clause says that the partners are 'bound to act according to the provisions of the Indian Partnership Act'; that they are in any case, and it is not clear which provision of the Partnership Act indicated the proportion in which the partners were to bear the losses in this case. Counsel for the appellant refers to Section 13(b) of the Partnership Act in this connection.
8. Section 13(b) reads :
'Subject to contract between the partners--......
(b) the partners are entitled to share equally in the profits earned, and shall contribute equally to the losses sustained by the firm.
We shall refer to Section 13(b) in more detail when we consider the other contention of the appellant, but assuming that this provision has any relevance to the facts of this case, which it has not, bringing in by implication Section 13(b) from a general statement that the partners are to act in accordance with the Partnership Act does not amount to specification of the partners' shares in the losses, and the instrument of partnership, itmust, therefore, be held, fails to comply with Section 26A of the Act, were this a requirement of that section.'
9. In support of the view, that shares of partners must be specified in the deed, reliance was placed on the decisions of the Mysore High Court in R. Sannappa and Sons v. CIT : 66ITR27(KAR) and of the Allahabad High Court in Hiralal Jagannath Prasad v. CIT : 66ITR293(All) . For the contrary view, reliance was placed on the decision of the Gujarat High Court in Thacker & Co. v. CIT : 61ITR540(Guj) and two decisions of the Kerala High Court in C. T. Palu & Sons v. CIT : 72ITR641(Ker) and CIT v. Iihappiri & George  88 ITR 332. The Supreme Court pointed out that for the purposes of the case before it, it was not necessary to consider at any length the two conflicting views, as it was undisputed that the officer must be in a position to ascertain the shares even if the section did not require a specification of shares in the instrument of partnership. The court then observed (p. 6):
'In this case the shares of the partners are not equal. In the absence of any indication to the contrary, where the partners have agreed to share the profits in certain proportions, the presumption is that the losses are also to be shared in like proportions. Jessel M.R. states the principle in In re Albion Life Assurance Society  16 Ch D 83 as follows:
'It is said, as a general proposition of law, that in ordinary mercantile partnerships where there is a community of profits in a definite proportion, the fair inference is that the losses are to be shared in the same proportion.'
10. In the case before us the partners having unequal shares in the profits, there can be no presumption that the losses are to be shared equally between them.
11. Section 13(b) of the Indian Partnership Act, 1932, reproduces the provisions of the repealed Section 253(2) of the Indian Contract Act, 1872. In Pitchiah Chettiar v. Subramanian Chettiar ILR  Mad 25, 28, Ramesam J. explained the scope of Section 253(2) of the Indian Contract Act, 1872:
'Section 253(2) of the Indian Contract Act lays down that all partners are entitled to share equally in the profits of the partnership business and must contribute equally towards the losses sustained by the partnership. As I read the section, it lays down two presumptions with which the court should start. The two presumptions are clubbed in one sub-section. The first is, if no specific contract is proved, the shares of the partners must be presumed to be equal. In the present case the plaintiff alleged unequal shares which were not denied by the defendants. So the parties being agreed on their pleadings as to the shares possessed by them in the profits there is no scope for the application of this first presumption. The second presumption is that where the partners are to participate in the profits in certain shares they should also participate in the losses in similar shares. Now, the section says that both should be in equal shares but implies that if unequal shares are admitted by the partners as to profits that applies equally to losses. In the absence of a special agreement, that this should be the presumption with which one should start is merely a matter of common sense and in India one has only to rely on Section 114 of the Evidence Act for such a principle.
12. It was stated by the Supreme Court that what was stated with respect to Section 253(2) of the Contract Act, 1872, applied equally to Section 13(b) of the Partnership Act, 1932. The court then proceeded to observe (page 7):
'The other rule that where the shares in the profits are unequal, the losses must be shared in the same proportion as the profits if there is no agreement as to how the losses are to be apportioned, does not also apply to this case. In this case even if the adult partners bear the losses in proportion to their respective shares in the profits, the amount of loss in the minor's share would still remain undistributed. Will the partners between them bear this loss equally, or to the extent of their own individual shares To this the instrument of partnership does not even suggest an answer. There is, therefore, no means of ascertaining in this case how the losses are to be apportioned. '
13. The decision is particularly appropriate : and, in the light of the provisions of the deed to which we have called attention and the principle formulated by the Supreme Court, the conclusion to be come to, does not occasion much of difficulty. Whether on the test of specification of the shares in the instrument of partnership, which is the ruling view in this court, or on the broader and liberal basis that the officer was not in a position to satisfy himself at the relevant time as to the shares of the minors in the losses, we think the assessee should lose.
14. We shall now refer to the decision of the Kerala High Court in United Hardwares v. CIT : 96ITR348(Ker) . A Division Bench of this court stated the principle that the specification of shares of partners in the instrument of partnership is a necessary requirement for registration. The expression used in the section covers both aspects of profits and losses. Therefore, it was observed that the shares of partners in the profits as well as in the losses should be specified. Specification, it was pointed out, meant describing or defining in detail. Dealing with the question whether in the absence of a provision in the partnership deed regarding the proportion in which the losses are to be contributed by the partners, registration could be granted or not, the Division Bench noticed the earlier decision of this court in CIT v. Ithappiri & George : 88ITR332(Ker) . That decisions had ruled that, in the absence of specification, registration could not be granted. The decisionemphasised that the question was not whether the rule of sharing was discernible either from Section 13(b) of the Partnership Act or from any other general principle, but as to whether Section 184 insists that there must be a specification of shares in the instant case. This court was of the view that the expression used in the section must normally count both as regards the profits as well as the losses, and that there was no compelling reason to read down the expression and to give it a limited meaning. The Division Bench rulings in CIT v. Ithappiri & George : 88ITR332(Ker) and United Hardwares v. CIT : 96ITR348(Ker) , which followed the same, are binding on us. On the view accepted in these decisions, there must be a specification of the shares in the losses as well in the instrument of partnership. Even on the safe and liberal view pointed out by the Supreme Court that the officer must be satisfied at the time of granting registration that the shares of the partners as regards profits and losses were ascertainable, the conclusion is irresistible that the instrument of partnership did not satisfy the requirements of Section 184.
15. In CIT v. Shah Mohandas Sadhuram : 57ITR415(SC) , the facts were that the partnership was constituted by two majors. Later on two minors were admitted to the benefits of the partnership. The latter were not liable for the loss in the partnership. It was ruled that they cannot be regarded as full partners as known to the partnership law. This was how the Supreme Court summarised its conclusion (page 421):
'In our opinion, the partnership deed, reasonably construed, only confers benefits of partnership on the two minors and does not make them full partners. The guardian has agreed to certain clauses in order to effectuate the decision of the major members to confer the benefits of the said partnership to the minors. Accordingly, we hold that the income-tax authorities should not have declined to register the firm.'
16. It was also observed that as long as a partnership deed does not make a minor a full partner, the partnership cannot be regarded as invalid on the ground that the guardian has purported to contract on behalf of a minor, if the contract is for the purposes as explained by the Supreme Court. The decision again appears to us significant.
17. Counsel for the respondent attempted to satisfy us that there was a specification of the-shares of the minors in regard to the loss. He referred to the decision of the Supreme Court in Kylasa Sarabhaiah v. CIT : 56ITR219(SC) , and to the decision of the Kerala High Court in C.T. Palu & Sons v. CIT : 72ITR641(Ker) . We have found nothing helpful in these decisions. Indeed, the latter decision of this court was one of those which took the view that specification of shares was necessary for the purpose of registration. Counsel referred us to the commentary in Kanga On the Law and Practice of Income Tax, 7th edn., Vol. I, at pp. 1014 and1015. The learned author has stated the view that the specification of shares need not be express and may be implied, and that the section itself is satisfied if the deed can reasonably be construed as clearly implying that the shares of the partners or minors are equal. The learned author adverted to the conflict of decisions as between the Gujarat High Court, the Andhra Pradesh High Court and the Kerala High Court on the one hand, and the Mysore High Court and the Allahabad High Court on the other and expressed his preference for the view of the Mysore and the Allahabad High Courts.
18. It appears to us that on the facts disclosed in the instant case, the decision could safely be rested without resolving the conflict of decisions as between the several High Courts, We are of the opinion that there is no specification of the shares of the loss of the two minor partners either expressly or impliedly and there was nothing on which the officer could be satisfied that the shares of the minors in the losses had been specified. Being so, we are of the opinion that the registration of the firm ought to be refused.
19. In the result, we answer the question referred in the negative, that is, in favour of the revenue and against the assessee. There will be no order as to costs.