These two appeals are directed again order of CIT passed under s. 263 of IT Act for asst. yr. 1981-82. By this order Commissioner held that assessment made by ITO including order for renewal of registration was erroneous and prejudicial to revenue and he, therefore, cancelled same under s. 263. He directed ITO to compute income under head "other sources" and to assess income in respective heads in proportion of 50 per cent. Commissioner found that for asst. yr. 1981-82 ITO had allowed continuation of registration on basis of order of registration granted for earlier year. Commissioner further found that activity carried on by assessee, was income from house property declared in return. He further found that in asst. yr. 1980-81 no business had been carried on by assessee and even then registration had been allowed by ITO. In view of this, he held that continuation of registration was not valid. For this purpose action under s. 263 was taken. It was found that partners of firm namely, Shri S. Sarin and Smt. Santosh Chhoker had entered into this partnership to carry on any business which partners decided from time to time. In fact, however, partners decided to make investment in commercial property and started deriving rental income from such property. Commissioner was of view that assessment of this income under head "Income from House Property" was not correct as property in question had not been registered in name of assessee. In this case as no business has been carried on by assessee there was no firm in existence and registration could not be allowed to it. He further observed that at best it was case of co-ownership of property as provided under s. 26 of ITA. But that would also be applicable if property is registered in name of assessee. He also pointed out that deduction of 1/6th for repairs was not automatically allowable. CIT(A) also rejected plea of assessee that CIT could not exercise his power under s. 263 in respect of such order of renewal of registration. It was held him that Commissioner could set aside any order if it was erroneous in so far as it is prejudicial interest of Revenue. Before Commissioner point raised was that while filing return assessee had shown income for two periods in same years. It was submitted that if proper income is assessed, there would be no underassessment even if some expenses had not to be allowed. Commissioner further rejected plea of assessee that in case income was not assessable as income from property, it could not be assessable at all. He also rejected plea that assessee should be treated as owner as he had paid full consideration. In view of this position. CIT held order passed by ITO to be erroneous and prejudicial to Revenue and cancelled it with direction given above. ld. Counsel for assessee submitted that two appeals have been filed because Commissioner cancelled continuation of registration and l s o cancelled assessment made by ITO. He submitted that registration of firm having been allowed by ITO for asst. yr. 1980-81, continuation of registration was automatic under s. 184(7) if conditions given in that sub-section are complied with. He submitted that in present case declaration as required had been only filed. In view of this registration granted had effect in this year as well and this did not constitute any order passed by ITO which could be cancelled by ld. Commissioner. It was further submitted that basis adopted by ld. Commissioner for cancelling registration was wrong. partnership deed between two partners contemplated that firm shall carry on business of Trading agency business to local/foreign buyers, and also builders or any other business decided upon by partners. It was submitted that partners decided to acquire commercial plot and to exploit it. It was further contended that under IT Act, income from exploitation of commercial property may be taxable under any head but as far as assessee was concerned, it was business to which partners had agreed. In this connection, it was submitted that before ld. Commissioner his attention has been drawn to decision of Madras High Court in case of CIT vs. Admiralty Flats Motel (1982) 133 ITR 895 (Mad), wherein it has been held that meaning of term "business" in relation to Partnership Act was not restricted to concept of business envisaged under provisions of IT Act. It was contended that partners had decided commercially to exploit commercial flat and it was also possible that they could make capital gain at appropriate time. It was further submitted that there could be valid partnership for carrying on activity of leasing property for any other commercial asset. Regarding quantum of income, it was submitted that though income was assessable as income from other sources as per decision of Delhi High Court and repair charges were not to be allowed automatically computed by ITO was more than proper income assessable in this year as income for more than 13 months had been included. It was contended that if income of 12 months constituted in previous year is assessed, income will not be more than what has been assessed by ITO. It was, therefore, submitted that n o prejudice to Revenue was caused by action of ITO. It was also pointed out that for succeeding year also IAC had treated firm as registered firm and had made assessment on that basis. It was therefore, contended that order of CIT should be set aside. departmental representative relied on order of CIT. She submitted that firm was not entitled to registration as there was no business carried on by assessee. Regarding quantum of income it was submitted that in respect of income from other sources whatever income is shown by assessee had been assessed to tax. We have considered rival submissions. As far as order of Commissioner relates to cancellation of continuation of registration, we are of view that under s. 184(7) continuation of registration is automatic as registration is operative for subsequent years if conditions given in s. 184(7) are satisfied. In case of CIT vs. Nitya Nand Deoki Nandan (1981) 21 CTR (All) 68: (1981) 29 ITR 177 (All) it had been held by Allahabad High Court that Commissioner had no jurisdiction in exercise of his revisional powers under s. 263 to cancel continuation of registration. Only if continuation of registration is defective in sense that any condition necessary in section is not satisfied, Commissioner may revise assessment in so far as it was made in status of registered firm. It is true that in case of CIT vs. Jogadhari Electric Supply Industrial Co. (1981) 25 CTR (P&H) 94: (1983) 140 ITR 490 (P&H) Punjab and Haryana High Court held that matter of continuation of registration of firm was proceeding under Act and certificate granted by ITO would be covered under s. 263(1) of IT Act. Noting this divergence of this judicial opinion, we may consider facts of this case. We do not agree with ld. Commissioner that partnership was invalid as no business was being carried on by firm. It is not in dispute that firm was constituted under Partnership Deed and deed contemplated carrying on of business. It further contemplated that partners could carry on any business activity. They had to distribute among themselves profit of such activity. It appears that partners decided to acquire commercial property by raising loan as substantial amount of interest has been claimed for acquisition of property. Where two persons have combined jointly to acquire such commercial property and they have exploited that property of profit and intended to exploit in future as well, it cannot be said that there is no business carried on by firm. fact that such income is assessable as income from other sources or income from house property would not itself change nature of activity. As already stated above Courts have held that concept of business for purposes of Partnership Act is different from concept of business in IT Act where income has to be assessed under various heads for purpose of computation. We would, therefore, hold that activity carried on by partners of firm would not disentitle them from grant of registrations. basis adopted by Commissioner, therefore, in our opinion was not correct. We, therefore, hold that cancellation of continuation registration was not valid. To this extent order of ITO is restored. In so far as quantum of assessment is concerned, we find that Commissioner has directed ITO to assess income under head "other sources". This direction of Commissioner was in accordance with law. Commissioner is also right in observing that 1/6th for repairs could not be allowed automatically though expenses actually incurred may be considered for deduction by ITO. To extent that ITO had allowed this deduction, his order was erroneous and prejudicial to interest of Revenue. assessee has raised question of overall income assessed by ITO. It was stated that annual rental of property was not as much as ITO. It was stated that annual rental of property was not as much as shown by assessee as assessee had included rental for longer period. Commissioner has met this point by observing that income from other sources may include any other income which may be received by assessee and it is not confined to rental of 12 months. We are of view that this alone would not take away prejudice to Revenue as income was taken as shown by assessee and full circumstances of assessment of that income is not very clear from assessment order. We, therefore, uphold order of Commissioner in so far as it relates to setting aside of assessment and in directing ITO to make fresh assessment and to compute income under head "other sources" We, therefore, allow assessee's appeal in so far as it relates to continuation of registration and allow in part in so far as it relates to making of fresh assessment in accordance with law. *** CEAS CORPN. v. INCOME TAX OFFICER