Partnership registration renewal fails where the deed does not clearly show loss-sharing after a partner attains majority.

Renewal of registration under section 184(7) of the Income-tax Act, 1961 requires that the partnership instrument continue to evidence the partners' shares with sufficient certainty and that there be no change in the constitution of the firm or in those shares. Where a partner who had been a minor attains majority and the deed does not show how losses are to be apportioned after that change, the earlier loss-sharing arrangement cannot be presumed to continue. On the facts, the partnership deed did not disclose the loss-sharing basis after the minor became a major, so the requisite certainty for continued registration was absent and renewal was refused.

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Issues: Whether the assessee-firm was entitled to renewal of registration for the relevant assessment years when one partner attained majority and the loss-sharing arrangement could not be ascertained from the partnership deed.

Analysis: Renewal under section 184(7) of the Income-tax Act, 1961 depends on the absence of any change in the constitution of the firm or in the shares of the partners as evidenced by the instrument of partnership. The Court applied the principle that, where partners have unequal shares and the deed does not disclose how losses are to be apportioned after a material change in the status of one partner, there is no basis for assuming the continuance of the earlier loss-sharing arrangement. On the facts, after the minor became a major, the proportion in which losses were to be shared could not be gathered from the partnership deed, and the required certainty for continued registration was lacking.

Conclusion: The assessee-firm was not entitled to renewal of registration.

Ratio Decidendi: For continued registration of a firm, the partnership instrument must disclose the shares of the partners with sufficient certainty, including the manner of apportionment of losses; if, on a material change, the loss-sharing shares cannot be ascertained from the deed, renewal is not available under section 184(7) of the Income-tax Act, 1961.

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