Partnership registration cannot be denied for an initial bookkeeping error where rectification was made before tax enquiry.

A partnership firm's registration cannot be rejected merely because its books initially recorded an equal profit split when the deed prescribed a different 60:40 ratio. The incorrect entries were rectified before the income-tax enquiry began, showing an inadvertent bookkeeping error rather than any deliberate departure from the deed. On that basis, the objection to registration was unsustainable, and the assessee succeeded on the issue.

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Issues: Whether the assessee's claim for registration could be rejected because the profit-sharing entries in the books showed an equal division of profits, although the partnership deed prescribed a different ratio.

Analysis: The partnership deed fixed the partners' shares at 60% and 40%, while the books initially reflected a 50% division. The rectification entries were made before the income-tax enquiry began, indicating that the incorrect entries were the result of an inadvertent bookkeeping mistake and not a knowing departure from the deed.

Conclusion: The rejection of registration on this ground was unsustainable and the assessee succeeded on the issue.

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