Partnership registration turns on sufficient disclosure of individual shares, not exact fractions, where the deed otherwise satisfies statutory requirements.

Registration under section 26A of the Indian Income-tax Act, 1922 depends on a partnership deed that reasonably and sufficiently specifies the individual shares of the partners and satisfies the prescribed procedural requirements. The word "specify" does not require an arithmetically exact statement of fractions if the deed, read as a whole, adequately defines the profit and loss sharing arrangement. A collective description of some participants does not by itself defeat registration where the substantive agreement is between the individual signatories and the firm otherwise meets the statutory conditions.

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Issues: Whether the assessee-firm was entitled to registration under section 26A of the Indian Income-tax Act, 1922, despite the partnership deed describing one partner as a firm and the shares of some participants being grouped in collective form.

Analysis: Registration under section 26A depends on a firm being constituted by an instrument of partnership that specifies the individual shares of the partners and satisfies the prescribed procedural requirements. The deed must be read reasonably and as a whole, and the statutory word "specify" denotes adequate description or definition of the shares, not necessarily an arithmetical statement in precise fractions. The material showed that the deed in substance identified the profit and loss sharing arrangement among the major partners and those admitted to benefits, and the collective description of the yarn shop did not alter the legal reality that the agreement operated between the individual partners who had signed the application. A defect, if any, in the constitution of the yarn shop itself did not defeat the assessee-firm's entitlement where the conditions for its own registration were fulfilled.

Conclusion: The assessee-firm was entitled to registration under section 26A; the negative answer recorded by the High Court was set aside.

Ratio Decidendi: For registration of a firm under section 26A of the Indian Income-tax Act, 1922, the partnership deed must reasonably and sufficiently disclose the individual shares of the partners, and a collective description of some participants does not by itself defeat registration if the substantive agreement and prescribed requirements are otherwise satisfied.

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