VIMAL GANDHI, J.M. This appeal by assessee for asst. yr. 1980-81 is directed against order of AAC upholding order of ITO refusing to grant registration to assessee-firm under s. 184/185 of IT Act. assessee-firm was constituted with two partners, Shri Ashwani Kapoor and Shri Gulam Nabi as per instrument of partnership deed dt. 7th Feb., 1979. As per cl. 3 of partnership deed profit share allocation between two partners Shri Ashwani Kapoor and Shri Gulam Nabi were 75 per cent and 25 per cent share in profits of partnership. assessee applied for registration by filing Form No. 11 alongwith copy of partnership deed on 27th Oct., 1979. ITO found that deed dt. 7th Feb., 1979 was silent on point as to how losses were to be shared between partners. He was of opinion that he assessee was to entitled to registration. assessee before ITO filed copy of rectification deed dt. 10th Nov., 1982 to show that from very start partners had agreed to share losses in same ratio in which they were entitled to share profits and thus inadvertent clerical omission in deed dt. 7th Feb., 1979 stood rectified. ITO held that subsequent agreement dt. 10th Nov., 1982 was not in existence prior to end of previous year and, therefore, could not be considered for year and, therefore, could not be considered for granting registration for year under consideration. As provision for sharing losses was not made assessee-firm was held to be not entitled to registration under s. 184/185 of IT Act. assessee challenged above order of ITO before AAC but remained unsuccessful. As per reasons and case law discussed by ld. AAC in para 4(a) of order, it was held that ITO was justified in refusing to grant registration to assessee-firm. plea that in view of s. 13(b) of Indian Partnership Act, partners must be deemed to have agreed to share losses of partnership in ratio in which they were entitled to share profits was rejected by ITO on basis of decision of said case of Mandyala Govindu & Co. vs. CIT 1976 CTR (SC) 20: (1976) 102 ITR 1 (SC). assessee had brought issue before Tribunal. We have heard parties and have examined records produced before us. Both parties cited several decisions to support their rival claims but, in our opinion, it is unnecessary to examine in detail submissions made before us. In our opinion, matter is fully covered by decision of Supreme Court in case of Mandyala Govindu & Co. vs. CIT 1976 CTR (SC) 20: (1976) 102 ITR 1 (SC). In above decision their lordships with reference to s. 13(b) of Indian Partnership Act made following observations: 'In absence of any indication to contrary, where partners have agreed to share profits in certain proportions, presumption is that losses are also to be shared in like proportions. Jeasel M.R. states principle in Inre. Albion life Assurance Society as follows: "It is said, as general proposition of law, that in ordinary mercantile partnerships there is community of profits in definite proportion. fair inference is that losses are to be shared in same proportion". Their lordships further approvingly quoted decision of Ramesam. J in Picthiah Chettair vs. Subramanian Chettiar (1990) 16Ch D 83 on s 253 (2) of Indian Contract Act 1872 which was held to be equally applicable to s. 13 (b) of t h e partnership Act. 1932 second presumption raised under above provisions as reproduced by their lordships in order is as under; "The second presumption in profits in certain are to participate in profits in certain shares they should also participate in looses in similar shares now section says that both should be in equal shares but implies that if unequal shares are admitted by partners as to profits that applies equally to losses. In absence of special agreement, that this should be presumption with which one should start is merely matter of common sense and in India one has only to rely on s. 144 of Evidence Act for such principle." Thus it is clearly laid down that where there is no agreement presumption under s. 13 (b) can be raised that partners are to share losses in proportion in which they are to share profits. In our opinion Id. AAC misapplied above quoted decision of Supreme Court. above decision clearly supports assessee and we see no reason as to why in absence of anything to contrary partners should not be held to be liable to share losses in proportion in which they are to share profits of firm. Another decision of Hyderabad Bench of Tribunal in case of Janaki Nursing Home vs. ITO ITA. No 980 (Hyd) /80 order dt. 30th April, 1981 in similar circumstances has already applied above decision of Supreme Court and held that firm was entitled to registration. We therefore, hold that assessee was entitled to registration. Apart from above facts, there are other circumstances. One Schedule to Form No 11 submitted by assessee in which in column No. 2 assessee in gave ration in which partners were liable to share profits as well as losses of partnership and secondly rectification deed confirming that from very start it was agreed that partners would share losses in ratio of 75 per cent and 25 per cent have wrongly been ignored by assessing authority in this case No doubt rectification deed was executed after end of related previous year but same had clarified agreement entered into by partners on 7th Feb., 1979 could not be rejected on ground that it has come it into existence after end of accounting period unless it was shown that contents of rectification deeds were not true. In view of above documentary evidence, in our opinion authorities below were not therefore, justified in refusing to grant registration to assessee firm. For above reasons orders of authorities below are set aside and ITO is directed to grant registration to assessee firm. In result, appeal of assessee is allowed. *** KASHMIR NAAZ RESTAURANT v. INCOME TAX OFFICER