Judgment :- MISHRA J. Pursuant to the direction of this court in T. C. P. No. 347 of 1980 the instant reference has been made and we are asked accordingly to answer the question, "whether, on the facts and in the circumstances of the case, the Appellate Tribunal is correct in law in holding that the assessee is a partnership validly constituted and accordingly directing to grant registration to the firm for the assessment year 1975-76 in T. C. No. 768 of 1982 and for the assessment year 1976-77 in T. C. No. 1005 of 1982 ?" * The above has arisen in a proceeding for the assessment of the income-tax, which the assessee is called upon to pay by the Income-tax Officer for the assessment years aforementioned. The assessee claimed registration on the basis of an instrument described as a deed of partnership dated January 20, 1974. The instrument revealed that the assessee, Vijay Traders, was carrying on business as a firm constituted under a deed dated December 4, 1970, with Pandurangan and B. A. Majeeth as partners. Majeeth expired on November 13, 1973, and the firm stood dis solved, Since Majeeth had expressed his desire that his wife should be taken in as a partner in the event of his death, Smt. Shammi Majeeth, his wife, was taken in as a partner under the deed dated January 28, 1974. This partnership, according to the assessee, was to be for a period of 11 years commencing from April 1, 1974, the capital was to be Rs. 80, 000 for which Pandurangan was to contribute Rs. 30, 000 and Mrs. Shammi Majeeth was to place at the disposal of the firm the site taken on lease by her husband, over which a construction was put up, the total value of which was Rs. 50, 000. The relevant clauses of the deed are extracted in the order of the Tribunal as follows "The partnership was for a period of 11 years commencing from April 1, 1974. The capital was to be Rs. 80, 000 out of which Shri Pandurangan was to contribute Rs. 30, 000, Mrs. Majeeth placed at the disposal of the firm the site taken on lease by her husband. Clause 5 of the deed provided as underThe party of the first part hereby guarantee a sum of Rs. 1, 750 (Rs. The capital was to be Rs. 80, 000 out of which Shri Pandurangan was to contribute Rs. 30, 000, Mrs. Majeeth placed at the disposal of the firm the site taken on lease by her husband. Clause 5 of the deed provided as underThe party of the first part hereby guarantee a sum of Rs. 1, 750 (Rs. one thousand seven hundred and fifty) per month as her share of profits so long as the party of the first part is managing partner of the firm. The said guaranteed share of profits shall be paid by the party of the first part to the party of the second part on the first day of the succeeding month. In the absence of inadequacy of profits the said amount shall be payable out of the capital account of the party of the first part. The profits shall thus be divided as under (1) Party of the second part of Rs. 21, 000 (2) The party of the first part balance of the net profit The party of the second part shall not be liable to losses if any Clause 8 further provided as under 'Party No. 1 shall be the managing partner who shall be solely responsible for the management and administration of the firm, maintenance of accounts, correspondence, borrowal, operation of the bank account in the name of the firm, etc. The managing partner shall be entitled to the exercise of his absolute discretion in the discharge of any of the aforesaid duties without any need for concurrence or approval of the party of the second part'. " Clauses 15, 16, 17 and 18 further stated as under " 15. In the event of the death of any of the partners the son or sons of the deceased partner shall be taken as a partner by the remaining partner and the business shall be continued uninterrupted 16. All fresh constructions put up or machinery acquired after April 1, 1974, may be taken over by the managing partner and those up to March 31, 1974, by the party No. 2 at the time of dissolution 17. At the time of dissolution of the firm, party No. 1 need not pay any amount to party No. 2 towards her capital account if party No. 2 takes the constructions and machinery as on March 31, 1974 18. At the time of dissolution of the firm, party No. 1 need not pay any amount to party No. 2 towards her capital account if party No. 2 takes the constructions and machinery as on March 31, 1974 18. The partner of the second part should not borrow any money on behalf of the firm." * The assessee on the said basis sought registration of the partnership. The Income-tax Officer took the view that Mrs. Majeeth had no partnership right and all that she was entitled to was a monthly payment of Rs. 1, 750 from Pandurangan. The Income-tax Officer held accordingly that there was no valid partnership. The Appellate Assistant Commissioner, however, reversed the order of the Income-tax Officer and held in favour of the assessee. The Revenue appealed to the Tribunal and the Tribunal has affirmed the view of the Appellate Assistant Commissioner There is a departure from the Partnership Act and Rules in Chapter XVI of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), wherein special provisions have been made applicable to the partnership firms. A firm or partnership, under the Partnership Act, 1932, is not a legal entity separate and distinct from partners and is only compendious description of individuals, who compose the firm. A partnership firm is not a legal person even though it has some attributes of a legal personality. A partnership firm is not created by status, but arises from contract. A collective noun, a compendious expression to discriminate an entity and not a person, however, is given statutory recognition, under section 182 of the Act, notwithstanding anything contained in sections 143 and 144 and subject to the provisions of sub-section (3), that "When any of the partners of a registered firm is a non-resident, the tax on his share in the income of the firm shall be assessed on the firm at the rate or rates which would be applicable if it were assessed on him personally, and the tax so assessed shall be paid by the firm" after assessing the total income of the firm--(i) the income-tax payable by the firm itself shall be determined ; and (ii) the share of each partner in the income of the firm shall be included in his total income and assessed to tax accordingly. Sub-section (2) of section 182 says : "If such share of& any partner is a loss, it shall be set off against his other income or carried forward and set off in accord ance with the provisions of sections 70 to 75" * Section 184 prescribes for an application for registration of a firm for the purposes of the Act to be made to the Income-tax Officer on behalf of any firm, if, (i) the partnership is evidenced by an instrument ; and (ii) the individual shares of the partners are specified in that instrument. The application, it is provided under sub-section (6) of section 184, shall be made in the prescribed form and shall contain the prescribed particulars. Section 185 provides that on receipt of an application for the registration of a firm, the Income-tax Officer shall enquire into the genuineness of the firm and its constitution, as specified in the instrument of partnership, and (a) if he is satisfied that there is or was during. the previous year in existence a genuine firm with the constitution so specified, he shall pass an order in writing registering the firm for the assessment year ; and (b) if he is not so satisfied, he shall pass an order in writing refusing to register the firm. Section 186 gives to the Income-tax Officer power after giving the firm a reasonable opportunity of being heard and with the previous approval of the Inspecting Assistant Commissioner, to cancel the registration of the firm in any particular assessment year. There are several provisions in Chapter XVI of the Act for the assessment of firms, changes in the constitution, succession and dissolution and discontinuance of business with which however, we do not feel concerned in the instant petition. There are several provisions in Chapter XVI of the Act for the assessment of firms, changes in the constitution, succession and dissolution and discontinuance of business with which however, we do not feel concerned in the instant petition. We have found in the order of the Income-tax Officer that he has taken notice of the past business history of the firm and an overall view of the relationship between Pandurangan and Majeeth in connection with the business of the firm and in the order of the Appellate Assistant Commissioner that the essential ingredients of a partnership, i.e., there must be an agreement between the parties, that the agreement must be to share the profits of a business and that business must be carried on by all or any of them acting for all, but while the Income-tax Officer applying the above test, found against the assessee, the Appellate Assistant Commissioner has noted the presence of the above ingredients in the relationship of Pandurangan and Majeeth and accordingly ordered in favour of the assessee. The Tribunal has approved the view of the Appellate Assistant Commissioner. We feel, however, on the facts of the instant case, that it is not possible to blame either the Income-tax Officer or the Appellate Assistant Commissioner or the Tribunal, for the views they have taken, for, it will be altogether wrong for any person to say that in deciding whether there is a genuine partnership before registration, as contemplated under section 185(1) of the Act, it is not necessary to consider the cumulative effect of all the facts and the circumstances taken together and that there should be no attempt to find out what was the real nature of the relationship between the alleged partners. It is indeed necessary in all cases to consider the cumulative effect of all the facts and circumstances taken together and always to make an attempt to find out what was the real nature of the relationship between the alleged partners, whether in fact they were partners or the deed was created only to seek a registration of the firm for evading the tax. The three essential elements of a partnership are indeed the three mentioned in the order of the Appellate Assistant Commissioner, to reiterate, (1) there must be an agreement entered into between all the partners concerned ; (2) the agreement must be to share the profits of the business ; and (3) the business must be carried on by all or any of the partners concerned, acting for all. It follows from the scheme of the Partnership Act and it is stated clearly in section 6 thereof, that in determining whether a group of persons is or is not a firm, or whether a person is or is not a partner in a firm, regard shall be had to the real relation between the parties, as shown by all relevant facts taken together and it is explained as "Explanation l.--The sharing of profits or of gross returns arising from property by persons holding a joint or common interest in that property does not of itself make such persons partners; "and" Explanation 2.--The receipt by a person of a share of the profits of a business, or of a payment contingent upon the earning of profits or varying with the profits earned by a business, does not of itself make him a partner with the persons carrying on the business ; and, in particular, the receipt of such share or payment--(a) by a lender of money to persons engaged or about to engage in any business ; (b) by a servant or agent as remuneration ; (c) by the widow or child of a deceased partner, as annuity ; or (d) by a previous owner or part owner of the business, as consideration for the sale of the goodwill or share thereof ; does not of itself make the receiver a partner with the persons carrying on the business." What is, however, important in the scheme of the provisions in Chapter XVI of the Act is to notice that while determining the income-tax payable by the firm, the Income-tax Officer is also required to determine the share of each partner in the income of the firm and if such share of a partner is a loss, to set off the same against the individual partrner's other income, or to carry forward and set off in accordance with the provisions of sections 70 to 75. We thought, we need, however, in the instant case, not go further than noticing the above, to state that the legislation governing the registration of firms for the purposes of the Act, has indicated that the shares of partners in profits and losses should be found specified in the instrument of partnership to enable the income-tax authorities to make proper assessment of the income of the firm or the individual partners of the firm and for that purpose to make out whether the firm is genuine or not. The requirement, as envisaged under section 184(1)(ii), that is, "the individual shares of the partners are specified in that instrument", refers in our view, to shares in the profits as well as losses. An instrument, thus, which shall specify the share of the partners for the purposes of the registration, must carry particulars for sharing the profits as well as the sharing of the losses. We may advert at this stage to section 13 of the Partnership Act, which provides, "Subject to contract between the partners--(a) a partner is not entitled to receive remuneration for taking part in the conduct of the business, (b) the partners are entitled to share equally in the profits earned, and shall contribute equally to the losses sustained by the firm ......" The entitlement envisaged is one, which undoubtedly shall cover agreements or contracts of partnership in general ; but the provisions in section 184(1)(i) and (ii) read together rule out any possibility of introducing the concept of mutual rights and liabilities, as envisaged under the Partnership Act, if the instrument has not specified the sharing of profits as well as lossesWe intend to pick up a judgment of the Calcutta High Court in the case of CIT v. Janata Medical Stores 1985 (155) ITR 377 , 1985 (46) CTR 340, 1985 (23) TAXMAN 426 to express our complete agreement with the opinion therein. We have more than one reason to do so as the judgment of the Calcutta High Court is one, which has taken care to notice the law in England and the departure from that in India since the judgment of the Supreme Court in Kamath (K. D.) and Co. v. CIT 1971 (82) ITR 680, 1972 (1) CTR 124, 1971 (2) SCC 873 , 1972 (1) SCR 1034 , 1972 CTR(SC) 124. v. CIT 1971 (82) ITR 680, 1972 (1) CTR 124, 1971 (2) SCC 873 , 1972 (1) SCR 1034 , 1972 CTR(SC) 124. The Calcutta High Court has extracted a passage from Lindley on the Law of Partnership, 13th edition, which is as follows: "'It often happens that persons agree that all profits shall be shared rateably, and nevertheless, that all losses shall be borne by some or one of them exclusively. Such an agreement is not necessarily invalid as a nudum pactum ; for it is nothing more than an agreement, providing, amongst other things, that some or one of the partners shall indemnify the others against losses ; and the very fact that these latter become, or agree to become, partners is quite sufficient consideration to give validity to a contract that they shall be indemnified.' Such agreements appear, moreover, to be reasonable, where the partners indemnified, leave the whole management of the concern to their co-partners. A salaried partner too is often given such an indemnity either expressly or impliedly by provisions which make the partners entitled to the residual profits exclusively liable for losses." * Counsel for the assessee in the case before the Calcutta High Court attempted to distinguish the judgment of the Supreme Court in the case of Kamath and Co. 1971 (82) ITR 680, 1972 (1) CTR 124, 1971 (2) SCC 873 , 1972 (1) SCR 1034 , 1972 CTR(SC) 124 and contended before the Calcutta High Court that the question whether sharing of loss was an essential ingredient of a partnership was not directly or specifically before the Supreme Court and the said decision should not be read as having finally laid down that sharing of loss is an essential condition, in view of the clear law which preceded such a decision. The Calcutta High Court has also considered the judgment cited before it in Raghunandan Nanu Kothare v. Hormasji Bezonji Bamji, 1927 AIR(Bom) 187 which held "It is not essential to constitute a partnership that the partners should agree to share the losses." * and the judgment of the Allahabad High Court in Mirza Mal Bhagwan Das v. Rameshar, 1929 AIR(All) 536, 540, which held (at page 381 of 155 ITR) "An agreement to share the loss is not a necessary ingredient of a partnership under the Indian Contract Act." * It has referred to a Full Bench judgment of the Lahore High Court in B. C. G. A. (Punjab) Ltd. v. CIT 1937 (5) ITR 279 which held in a reference under section 66(2) of the Indian Income-tax Act, 1922, that while construing section 4 of the Indian Partnership Act, 1932, one would find that the mere circumstance that a person is to share profits only and not losses did not, by itself, militate against the presumption of partnership. Besides the judgment in Kamath and Co.s case 1971 (82) ITR 680, 1972 (1) CTR 124, 1971 (2) SCC 873 , 1972 (1) SCR 1034 , 1972 CTR(SC) 124, the Calcutta High Court considered the judgment of the Supreme Court in (M. P.) Davis v. Commr. of Agrl. I.T 1959 (35) ITR 803, 1959 AIR(SC) 719, which was a case with respect to a dispute under section 26 of the Coorg Agricultural Income-tax Act. The assessee had claimed partnership between two brothers. The capital of the firm was found to belong to one with the express provision that the other partner would not be entitled to contribute anything towards capital and would have no power to charge or encumber or deal with such capital which, on dissolution, would go back to the contributing partner. It was provided further that the non-contributing partner would employ himself diligently in the business and submit annual estimates of expenditure to be incurred to be passed by the contributing partner. The Supreme Court in the said case noted that the powers of the contributing partner over the other were those of a master over his servant or a principal over his agent. The Supreme Court noted further that it was not possible to ascertain from the deed as to how losses, if any, would be shared. The Supreme Court in the said case noted that the powers of the contributing partner over the other were those of a master over his servant or a principal over his agent. The Supreme Court noted further that it was not possible to ascertain from the deed as to how losses, if any, would be shared. On such facts and taking into account, the conduct of the parties in the venture, the Supreme Court held that the deed did not result in a partnership and observed as follows (at page 382 of 155 ITR) "If it was intended to create a real partnership, one would have thought that some provision would have been made for the sharing of the loss, especially as the share of the profit going to the appellant is immensely large compared with the share going to his brother." * In Kamath and Co.'s case 1971 (82) ITR 680, 1972 (1) CTR 124, 1971 (2) SCC 873 , 1972 (1) SCR 1034 , 1972 CTR(SC) 124, the deed excluded the working partners from the operation of the bank account and the partners were liable to be expelled from the firm or from contribution of capital at the instance of the principal partner. In spite of the aforesaid, the Supreme Court came to the conclusion that a valid partnership had been constituted in that case inasmuch as all the essential conditions were present. The Calcutta High Court has then observed as follows (at page 382 of 155 ITR) "In English law as cited, it appears that it is recognised that by agreement, a partner or partners can be excluded from loss. It also appears that till the decision in K D. Kamath and Co.'s case 1971 (82) ITR 680, 1972 (1) CTR 124, 1971 (2) SCC 873 , 1972 (1) SCR 1034 , 1972 CTR(SC) 124, the law in India as laid down by the different High Courts recognised that a partnership could be validly constituted in which a partner or partners by agreement would be exempted from all losses. To the extent as above, we accept the submissions of the learned advocate for the assessee which in our view are of substance But the categoric observations of the Supreme Court in K D. Kamath and Co.'s case 1971 (82) ITR 680, 1972 (1) CTR 124, 1971 (2) SCC 873 , 1972 (1) SCR 1034 , 1972 CTR(SC) 124 which are binding on us, whether obiter or not, appear to have laid down the law further in India which departs from the English law and impliedly overrules the earlier decisions of the High Courts on the point After anxious consideration, we answer the question in the negative and in favour of the Revenue." * In Mandyala Govindu and Co. v. CIT 1976 (2) SCR 131 , 1975 AIR(SC) 2284, 1976 (1) SCC 248 , 1975 UJ 859 , 1976 (102) ITR 1, 1975 (36) STC 567, 1976 TaxLR 18, 1976 CTR(SC) 20, the Supreme Court has considered the question of registration under section 26A of the Indian Income-tax Act, 1922. The instrument of partnership disclosed that three persons and a minor who was admitted to the benefits of the partnership held shares : N--31 per cent., V--23 per cent., S--23 per cent. and minor J--23 per cent. One of the clauses of the instrument which had set out the shares of the partners provided, inter alia, that the profits of the partnership business would be divided and enjoyed according to the shares specified therein. There was no clause in the instrument specifying the proportion in which the three adult persons were to share the losses, if any. The High Court had taken the view that unless the instrument of partnership specified the shares of the partners not only in the profits but also in the losses, the firm would not be entitled to registration under section 26A and negatived the contention raised on behalf of the assessee that clause 9 of the instrument indicated how losses were to be apportioned between the partners. Clause 9 of the instrument said "We (the partners) are bound to act according to the abovementioned stipulations and also according to the provisions of the Indian Partnership Act. . . Clause 9 of the instrument said "We (the partners) are bound to act according to the abovementioned stipulations and also according to the provisions of the Indian Partnership Act. . . ." After taking notice of the conflict of views between the Mysore High Court in R. Sannappa and Sons v. CIT 1967 (66) ITR 27 and the Allahabad High Court in Hiralal Jagannath Prasad v. CIT 1967 (66) ITR 293 on the one hand and the Gujarat High Court in Thacker and Co. v. CIT 1966 (61) ITR 540 and the Kerala High Court in C. T. Palu and Sons v. CIT 1969 (72) ITR 641, CIT v. Ithappiri and George 1973 (88) ITR 332 on the other hand, the Supreme Court in this judgment observed "There is thus a conflict of opinion in the High Courts on the point"(that is, whether shares of the partners in the losses must specified in the partnership deed for the purpose of registration) The Supreme Court further observed that it would not be necessary, however, for the purpose of the appeal before it to consider at any length the conflicting views of the different High Courts and decide which view is correct because on the facts of the case, the Supreme Court observed, the appeal was bound to fail on any view. The important observations of this judgment, however, which are, in our view, relevant for the case in our hand, are as follows (at page 5 of 102 ITR) "It is not, and it cannot be, disputed that the Income-tax Officer before allowing the application for registration must be in a position to ascertain the shares of the partners in the losses even if section 26A did not require the shares in the losses to be specified in the instrument of partnership. Counsel for the appellant argues that clause 9 of the instru ment refers to section 13(b) of the Partnership Act by implication and, accordingly, in the absence of any contrary indication, it must be held that the partners are liable to share the losses equally. The argument is not based on a correct appreciation of the scope of section 13(b) and the facts of the case. Section 13(b), it seems plain to us, makes the partners liable to contribute equally to the losses only when they are entitled to share equally in the profits. The argument is not based on a correct appreciation of the scope of section 13(b) and the facts of the case. Section 13(b), it seems plain to us, makes the partners liable to contribute equally to the losses only when they are entitled to share equally in the profits. In this case, the shares of the partners are not equal. In the absence of any indication to the contrary, where the partners have agreed to share the profits in certain proportions, the presumption is that the losses are also to be shared in like proportions. Jessel M. R. states the principle in Albion Life Assurance Society, In re 1880 (16) Ch(D) 83, 87 as follows' It is said, as a general proposition of law, that in ordinary mercantile partnership where there is a community of profits in a definite proportion, the fair inference is that the losses are to be shared in the same proportion.' In the case before us the partners having unequal shares in the profits, there can be no presumption that the losses are to be equally shared between them Section 13(b) of the Indian Partnership Act, 1932, reproduces the provisions of the repealed section 253(2) of the Indian Contract Act, 1872. In Pitchiah Chettiar v. Subramanian Chettiar 1935 (58) ILR(Mad) 25, 28, Ramesam explained the scope of section 253(2) of the Indian Contract Act, 1872 ' Section 253(2) of the Indian Contract Act lays down that all partners are entitled to share equally in the profits of the partnership business, and must contribute equally towards the losses sustained by the partnership. As I read the section, it lays down two presumptions with which the court should start. The two presumptions are clubbed in one sub-section. The first is, if no specific contract is proved, the shares of the partners must be presumed to be equal. In the present case the plaintiff alleged unequal shares which were not denied by the defendants. So the parties being agreed on their pleadings as to the shares possessed by them in the profits, there is no scope for the application of the first presumption. The second presumption is that where the partners are to participate in the profits in certain shares they should also participate in the losses in similar shares. So the parties being agreed on their pleadings as to the shares possessed by them in the profits, there is no scope for the application of the first presumption. The second presumption is that where the partners are to participate in the profits in certain shares they should also participate in the losses in similar shares. Now, the section says that both should be in equal shares but implies that if unequal shares are admitted by the partners as to profits that applies equally to losses. In the absence of a special agreement, that this should be the presumption with which one should start is merely a matter of common sense and in India one has only to rely on section 114 of the Evidence Act for such a principle.'The law stated here in the context of section 253(2) of the Contract Act, 1872, applies equally to section 13(b) of the Partnership Act, 1932 : the two provisions are in identical terms. On the facts of the present case and having regard to the scope of section 13(b), the section has plainly no application The other rule that where the shares in the profits are unequal, the losses must be shared in the same proportion as the profits if there is no agreement as to how the losses are to be apportioned, does not also apply to this case. In this case even if the adult partners bear the losses in proportion to their respective shares in the profits, the amount of loss in the minor's share would still remain undistributed. Will the partners between them bear this loss equally, or to the extent of their own individual shares ? To this the instrument of partnership does not even suggest an answer. There is, therefore, no means of ascertaining in this case how the lossses are to be apportioned." * A Full Bench of the Andhra Pradesh High Court in CIT v. Krishna Mining Co. 1980 (122) ITR 362, 1980 (15) CTR 203, 1980 (3) TAXMAN 493 and a Division Bench which has followed the said judgment in CIT v. Ravi Constructions 1988 (169) ITR 662, 1987 (66) CTR 210, 1987 (35) TAXMAN 17 and the Rajasthan High Court in Raj Construction Co. v. Addl. 1980 (122) ITR 362, 1980 (15) CTR 203, 1980 (3) TAXMAN 493 and a Division Bench which has followed the said judgment in CIT v. Ravi Constructions 1988 (169) ITR 662, 1987 (66) CTR 210, 1987 (35) TAXMAN 17 and the Rajasthan High Court in Raj Construction Co. v. Addl. CIT 1986 (157) ITR 734, 1985 (49) CTR 348, 1985 (23) TAXMAN 292 have taken the view that in order to entitle a firm to registration under the Income-tax Act, the specification of shares of the partners in profits as well as losses is necessary and if there is no such specification in the deed, it should at least be inferable from other materials on record. The final consensus in this behalf is that where the partnership deed suffers immunity from losses of one of the partners, it detracts from there being a genuine partnership between the executants of the deed and such a firm cannot be granted registration under the ActOur attention has been drawn to a Full Bench judgment of this court in R. M. Chidambaram Pillai v. CIT 1970 (77) ITR 494, which has been affirmed by the Supreme Court in CIT v. R. M. Chidambaram Pillai 1977 AIR(SC) 489, 1977 (106) ITR 292, 1977 (1) SCC 431 , 1977 (2) SCR 111 , 1977 (1) MLJ 50, 1977 CTR(SC) 71, 1977 SCC(Tax) 188, 106 ITR(SC) 292, 1977 TaxLR 214. The said case, however, has dealt with the question whether the salaries paid to the partners of a partnership firm constitute profits in their hands and whether they are taxable. The said case, however, has dealt with the question whether the salaries paid to the partners of a partnership firm constitute profits in their hands and whether they are taxable. The issue before us is altogether different, in the sense that we are, on the facts as above, required to consider whether in the absence of any mention in the deed of partnership or any other material to show how the partners will share the losses, the firm can be held to qualify for registration under section 185 of the Income-tax Act To sum up, thus we are of the considered opinion that while enquiring into the genuineness of the firm and its constitution as specified in the instrument of partnership, the competent authorities shall be entitled to take all relevant materials into account and see, in particular, the terms and conditions as specified in the instrument to find out whether the individual shares of the partners are specified in the instrument and wheth er it is possible with reference to the terms and conditions therein to identify the quantum of loss that falls to the share of each partner for the set off against his other income or for being carried forward and set off in accordance with the provisions of sections 70 to 75 of the Act. That is the only scheme envisaged for the assessment of registered firms and for registration accordingly and/or cancellation of registration in case registration had been granted wrongly. Applying the above, it is not possible to infer from the various clauses of the instrument that Mrs. Majeeth was in fact introduced as a partner in the firm which was dissolved after the death of her husband, Majeeth. There are good reasons to think that the leasehold which she assigned and some other properties which she brought to the firm were accepted on the term of payment each month of Rs. 1, 750 and nothing more out of the profits of the firm and she was kept immune from any loss of the business of the firm. The relationship between Pandurangan and Mrs. Majeeth was close to that of lessee and lessor and almost constituted a relationship of licensee and licensor. The Tribunal has committed an error in holding in favour of the registration of the firm.The references are answered accordingly. No costs.