TMI Blog1992 (5) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... esh Kumar Jain 20 per cent share. This position continued upto 30-9-1984 when a dissolution deed was executed in terms of which three partners, namely, Shri Mool Chand, Smt. Renu Jain and Shri Suresh Kumar Jain decided to retire from the firm. It was agreed that the firm M/s. Mool Chand Parveen Kumar was terminated and dissolved with effect from30-9-1984. The account books of the firm were closed down and the trading account, profit and loss account and balance sheet for the period from1-4-1984to30-9-1984were prepared. It was also agreed that the stock-in-trade, furniture and fixtures and liabilities and assets of the firm had fallen to the share of Smt. Nisha Jain, the continuing partner, who was free to use the same in the manner she liked. The continuing partner was also free to run the business as a sole proprietor or in partnership under this very name or in any other name, in the same line or in any other line, from the same premises or from any other premises and the out going partners were to have no connection or lien. over the same. 4. Smt. Nisha Jain, the continuing partner along with three others executed a new deed of partnership on 1-10-1984, according to which th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 87] 165 ITR 7202 (Cal.) and other decisions. 7. Shri Bhagwan Garg, the learned counsel for the assessee, on the other hand, submitted that a composite return was filed on 25-9-1985 under a mistaken notion, that as soon as the mistake was discovered, two separate returns were filed, that in the force of the revised returns the original return did not exist at all, that there was a dissolution of the old firm, that Smt. Nisha Jain had been authorised by the terms of the dissolution deed of 30-9-1984 to do the business of the sole proprietor or to enter into partnership with others, that the new partnership deed drawn on 1-10-1984 had clearly stated that the new firm had nothing to do with the old firm, that two account books had been maintained and consequently two profit and loss accounts, trading accounts and balance sheets had been drawn up and that the provisions of section 188 and not of section 187(2) were applicable to the facts of the instant case as this was the case of succession and not of a mere change in the partnership. Reliance was placed on the decision of the Delhi High Court in Addl. CIT v. Bal Kishan Dass Hari Kisan Dass [1984] 149 ITR 2023. 8. We have carefull ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtnership dated20-10-1969. The terms of the partnership indicated that it was a partnership ' at will '. The accounting period of the firm was financial year. On31-12-1976one of the partners retired from the partnership. Pursuant to the retirement of one of the partners the purpose mutually agreed was to dissolve the partnership and a deed of dissolution was executed on4-1-1977, evidencing the dissolution with effect from31-12-1976. It is agreed that the balance standing to the credit of the retired partner at the time of retirement shall be paid to him. With effect from1-1-1977the remaining three partners constituted themselves into a partnership firm. A fresh deed of partnership was executed onMarch 19, 1977, according to which, the partnership came into existence with effect from1- 1-1977. The new partnership had taken over all the assets and liabilities of the partnership dissolved on31-12-1976and had been carrying on the same business. Two returns were filed for assessment year 1977-78 by the two firms. The Assessing Officer, however, made a single assessment on the firm as constituted at the time of making the assessment on the ground that there had only been a change in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on and observed that the Supreme Court did not accept the contention of the Revenue that upon dissolution of a firm, succession to the old business by another person would arise only if a solitary partner takes over the assets and liabilities and carries on the business as a sole proprietor thereof or if some of the erstwhile partners along with some strangers took over the assets and liabilities of the old firm and carried on the business. According to the Supreme Court the question depended upon the intention of the parties to be gathered from the document or documents, if any, executed by and between the partners and other facts and surrounding circumstances of the case. The Delhi High Court further noted that though the preponderance of the view of the various High Courts was the same as that of the Delhi High Court, it considered it unnecessary to refer to all these decisions one way or the other. 14. In our considered opinion if the ratio of the Delhi High Court decision in the case of Bal Kishan Dass Hari Kisan Dass were to be applied then the decision of the learned Commissioner of Income-tax (Appeals) in the present case has got to be upheld. The firm consisted of 4 part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... produced before us either. The assessee was not the owner of the house property. There is no evidence that the assessee as a tenant had to pay the House-tax. We do not find any merit in this ground, which is hereby rejected. 16. The next ground is against a sum of Rs. 5,300 given as a donation being not considered as exempt under section 80-G. In the first instance, the entire amount of Rs. 5,300 which was disallowed by the Assessing Officer was not the subject-matter of appeal before the first appellate authority. The learned CIT (Appeals) had considered only the donation of Rs. 5,000 made to Dr. Vidya Sagar Kaushalaya Devi Memorial Trust. On going through the records it was seen by the learned Commissioner of Income-tax (Appeals) that the receipt of donation was dated 1-4-1985 whereas the accounts of the firm closed on 31-3- 1985. It was accordingly held that the donation of Rs. 5,000 was not relevant to the year under consideration. 17. The learned counsel for the assessee, however, submitted that the donation was given by way of a cheque dated 16-3-1985, that it took some time before the cheque could be encashed and that the mere encashment of cheque which fell in the subs ..... X X X X Extracts X X X X X X X X Extracts X X X X
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