Renewal of firm registration depends on distribution of prior-year profits to partners before the renewal application.

Renewal of registration of an assessee-firm under the Indian Income-tax Act, 1922 depended on compliance with the rule that the previous year's profits had to be distributed among the partners or credited to their individual accounts before renewal was sought. On the record, there was no material showing actual distribution or credit, and the assessee failed to displace the concurrent findings of the income-tax authorities and the Tribunal. The earlier authority cited by the court confirmed that division of prior-year profits was an essential requirement for renewal. The Tribunal was therefore justified in refusing renewal of registration.

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Issues: Whether the Tribunal was justified in refusing renewal of registration of the assessee-firm on the ground that the previous year's profits had not been distributed among the partners or credited to their respective accounts.

Analysis: Renewal of registration under the Indian Income-tax Act, 1922, required compliance with the rules governing distribution of profits among partners before the application for renewal was made. The record disclosed no material to show that the profits were either actually distributed or credited to the partners' individual accounts. The assessee did not produce material to displace the concurrent findings of the income-tax authorities and the Tribunal. The earlier decision relied upon by the Court confirmed that division of the previous year's profits was an incumbent requirement for renewal.

Conclusion: The Tribunal was justified in refusing renewal of registration, and the answer was against the assessee.

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