Partnership registration upheld despite omitted loss-sharing clause where deed otherwise showed genuine profit shares and partner relations.

A firm was entitled to renewal of registration under section 26A where the partnership deed, read as a whole, identified the partners' profit shares even though it did not separately spell out the loss-sharing arrangement. The court treated the omission as non-fatal because the instrument still showed a genuine partnership, with the minor admitted only to the benefits of partnership under section 30 of the Indian Partnership Act, 1932, and the adult partners bearing losses according to their shares. Section 26A was applied to prevent bogus or colourable firms from registration, not to defeat registration for a drafting omission affecting only the partners' internal loss set-off rights. Renewal was therefore allowed in favour of the assessee.

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Issues: Whether the firm was entitled to renewal of registration under section 26A when the partnership deed specified the partners' profit shares but did not expressly set out a separate allocation of the remaining loss share.

Analysis: The governing provisions required an application by a firm constituted under an instrument of partnership specifying the individual shares of the partners, and the prescribed form and rules contemplated disclosure of the share in profits or loss. The deed, read as a whole and reasonably construed, showed that the minor was admitted only to the benefits of partnership under section 30 of the Indian Partnership Act, 1932, while the adult partners were to bear losses according to their shares. The omission to spell out loss-sharing in meticulous detail did not make the instrument invalid for registration, because section 26A was directed against bogus or colourable firms and was not intended to deny registration on a ground that affected only the partners' own entitlement to set-off or carry-forward of losses.

Conclusion: The firm was entitled to renewal of registration and the question was answered in the affirmative, in favour of the assessee.

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