This is appeal by revenue against order of AAC, whereby assessees appeal has been allowed and ITO has been directed to grant registration to firm for assessment year 1980-81. 2. facts are that during relevant accounting year there was change in constitution of firm with effect from 1-1-1979. Shri Rameshlal retired with effect from 31-12-1978 and one Laxmichand joined with effect from 1-1-1979. firm made application for registration. It was found that distribution of profits was not in accordance with partnership deed and Shri Rameshlal, who had been partner for two months during relevant accounting year, was not given his share of profit and Laxmichand, who was partner for rest of accounting year, was given share for whole of year. ITO, therefore, refused registration to firm. assessee appealed and learned AAC was of opinion that mistake in allocation of profits was unintentional and it was mistake of accountant and genuineness of firm having not been doubted, he directed ITO to grant registration. Feeling aggrieved revenue has come to this Tribunal. 3. We have heard learned departmental representative and learned counsel for assessee. Reliance was placed by learned departmental representative on Setha Ram Dhanvir Singh v. CIT [1980] 123 ITR 150 (All.) in which it was held that where profits have not been divided according to provisions of partnership deed, firm cannot be granted registration. In that case, assessee pleaded for first time before Tribunal that erroneous allocation of profits was on account of mistake made by accountant. Tribunal had disbelieved this explanation. In case before us, as is evident, assessee had pleaded before AAC that incorrect allocation of profits was due to mistake made by accountant. At hearing before us, learned counsel for assessee also pointed out that error in allocation of profits has been rectified by making appropriate entries in personal accounts of respective persons. Though this was done on date when order under appeal was passed by learned AAC, i.e., 24-9-1983, fact remains that rectification had been done before matter came to this Tribunal and learned AAC has recorded finding that incorrect allocation of profits was unintentional and was result of lapse on part of accountant. 4. On other hand, on behalf of assessee, reliance was placed on CIT v. Ghulam Ahmad Khan & Bros. [1981] 130 ITR 636 (J & K) in which it has been held that error in division of profits is no basis for refusal of registration. learned counsel for assessee also pointed out that in subsequent year, assessee has been held to be genuine firm and registration was granted. This was not disputed by learned departmental representative. 5. In view of facts, as discussed above, we agree with learned AAC that incorrect allocation of profits was result of innocuous error. We, therefore, do not find any force in this appeal and it is hereby rejected. *** Income-tax Officer v. Laxmi Radio Electric & General Store