Sabyasachi Mukharji, J.
1. For the assessment years 1968-69, and 1969-70, under Section 256(1) of the I.T, Act, 1961, the following question has been referred to this court :
'Whether, on the facts and in the circumstances of the case, and on a correct interpretation of Section 184 of the Income-tax Act, 1961, and Rules 22 to 24 of the Income-tax Rules, 1962, the Tribunal misdirected itself in law in holding that the assessee was entitled to registration ?'
2. The assessee-firm was constituted by a deed of partnership dated 31st December, 1965, consisting of six partners and one Bhimchand Mangalchand Chowdhury, a minor admitted to the benefits of the partnership. After reciting the shares of the parties it has been set out by the Tribunal in a statement of the case which contained, inter alia, the following clauses :
'12. On and from the first day of month next succeeding the month in which the said Bhimchand Mangalchand Chowdhuri attains majority, he shall, if he elects to be a partner, be admitted as a partner in this partnership on the terms and conditions as to capital contribution and sharing of profits and losses among the partners as hereinafter mentioned as from the said date and the parties will execute such deeds on writing as may be necessary or proper.
Names of partnersCapital contributionShare of profitShare of loss
Rs.%%Mrs. Ratanben Mangalchand Choudhuri10,0001618Mrs. Bhartiben Shantilal Choudhuri10,0001618Mrs. Shantaben Surajmal Choudhuri10,0001618Hirachand Mangalchand Choudhuri10,0001618Rajnikant Dhirajlal Kamdar 105Mahendra Kumar Dhirajlal Kamdar 105Bhimchand Mangalchand Choudhuri10,0001618
13. It is hereby agreed and declared that this partnership is only between the six contracting parties hereto, namely, (1) Mrs. Ratanben, (2) Mrs. Bhartiben, (3) Mrs. Shantaben, (4) Mr. Hirachand, (5) Mr. Rajni-kant and (6) Mr. Mahendrakumar and through Mr. Hirachand is the karta of his HUF are not and are not to be regarded as partners (sic).'
3. It is not necessary for us to set out the other clauses which have been referred to by the Tribunal. The assessee made an application for registration under Section 185 of the 1961 Act, for two years under reference. The ITO, however, rejected the case, for the reasons mentioned in the order passed under Section 185 of the 1961 Act. The Assistant Commissioner upheld this order. There was an appeal. The Tribunal, after noticing the rival contentions and referring to the relevant provisions of law, observed, inter alia, as follows :
'8.1. There is no dispute that the assessee in the present appeals fulfilled conditions (ii) to (v). The only dispute between the assessee and Revenue is regarding the condition No. (i). According to the Department, the partners of the assessee should have executed a fresh deed of partnership on Sri B. M. Choudhuri's attaining majority, while, the assessee contended that reading the deed of partnership dated 31st December, 1963, along with the letters passed between the partners, there was 'an instrument of partnership specifying the individual shares of the partners'. In our opinion, an instrument of partnership can be either one single document or a number of documents reading together stipulating the rights and duties of the parties as well as their profit sharing ratio and that it is not necessary that there should be one single document as submitted on behalf of the Department. The facts obtaining in the decision of the Allahabad High Court Ganeshlal Laxmi Narain v. CIT : 68ITR696(All) . on which great reliance was placed on behalf of the Revenue, are clearly distinguishable from the facts which are to be found in the assessee's case. In that case, the name of the partner, who was admitted to the benefits of the partnership, was nowhere mentioned in the deed of partnership. In the present case, Sri B. M. Choudhuri's name has not only been mentioned in the deed of partnership but all the partners have agreed to admit him to the benefits of the partnership. In that case there was no documentary evidence that the minor had elected to be a partner on attaining majority. In the present case, no sooner did Sri B. M. Choudhuri attain majority, he intimated to the other partners of the firm that he had elected to be a partner of the firm and that he would agree with the terms and conditions as to capital contribution and share of profits or losses amongst the partners as mentioned in Clause 12 of the deed of partnership, with effect from 1st November, 1966. Lastly, in that case there was no documentary evidence that the existing partners had accepted the minor's election to be a partner in the firm, on his attaining majority. In the present case, the other partners, by their letter dated 1st November, 1966, had accepted Sri B, M. Choudhuri's election to be a partner in the firm with the same terms and conditions as agreed between them in the deed of partnership dated 31st December, 1965. In our opinion, the execution of a fresh deed of partnership on Sri B. M. Chodhuri's attaining majority would be a mere ritual as we are of the opinion that there was no necessity to execute a fresh deed of partnership in view of the specific clause, viz., Clause 12 contained in the deed of partnership dated 31st December, 1965, whereby the partners had agreed to revise sharing of profits or losses amongst them on Sri B. M. Choudhuri's attaining majority and electing to be a partner of the firm. Accordingly, we would direct the Income-tax Officer to grant registration to the assessee for the two years under appeal.'
4. In view of the facts of this case and the terms of the deed, in our opinion, the Tribunal was right in coming to the conclusion as it did. Incidentally, we may mention that in some other context, more or less the same view was taken by a Full Bench of the Allahabad High Court in the case of Badri Narain Kashi Prasad v. Addl. CIT : 115ITR858(All) . It is, however, not necessary for us to express any opinion on the reasons expressed by the learned judges of the Allahabad High Court.
5. In the premises the question is answered in the negative and in favour of the assessee. The parties will pay and bear their own costs.
Suhas Chandra Sen, J.
6. I agree.