TMI Blog1970 (5) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... benefits of the partnership. Clause 2 of the partnership deed provided that the partnership commenced on November 4, 1956, and clause 6 of the partnership deed provided that in the case of death or retirement of a partner the firm would not dissolve. One of the partners, Madan Lal, died on August 22, 1958. Thereafter, a partnership deed dated October 13, 1958, was executed creating a partnership between Hargovind, Jawahar Mal, Murlidhar, Ratan Lal, Jagdish Prasad and Smt. Ayodhya Devi, widow of Madan Lal, and two minors, Ram Kishore, son of Sita Ram, and Lakshmi Narain, son of Madan Lal, were admitted to the benefits of the partnership. Clause 2 of the partnership deed declared that the partnership commenced on September 18, 1958. It will be noticed that this date falls immediately after the close of the account year under consideration. The application for renewal of registration made on June 26, 1959, for assessment year 1959-60 specified the partners as in the partnership deed of December 28, 1956, and was signed by them except that in place of Madan Lal, who had died. it was signed by his widow, Smt. Ayodhya Devi. The Tribunal, in dismissing the second appeal filed by the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e question suggested by the assessee but an entirely different question which did not arise at all in the case. In our opinion, the objection is misconceived. The substance of the question referred by the Tribunal embodies the controversy whether the assessee was entitled to renewal of registration for the assessment year 1959-60 on the basis of the deed of December 28, 1956. The language in which the question has been framed by the Tribunal is not happy, but we are unable to hold that the Tribunal merely intended thereby to refer the question whether the assessee was entitled to apply for renewal of registration. The question essentially is whether the assessee should have been granted renewal of registration for the assessment year 1959-60 on the basis of the deed of December 28, 1956, and that is what we understand of the first question referred by the Tribunal to be. On the merits of the case, the first point to be considered is whether the firm constituted under the deed of December 28, 1956, came to an end and was followed by a new firm created by the deed of October 13,1958, or whether the same firm continued throughout and was merely reconstituted by the deed of October 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tween the partners after deducting one anna out of the profits for charity, while under clause 5 of the agreement of 1958, no provision was made for the deduction of any amount out of the profits on account of charity. Another point of difference lay in this that under the deed of 1956, the liabilities of the minor, Ram Kishore, were limited to the extent of the funds invested by him in the firm, while under the deed of 1958 he was not liable in respect of the losses at all. It will, therefore, appear that the structure of the two partnerships was essentially different and it cannot be said that the firm under the deed of 1958 was merely a continuation of the earlier firm. In our opinion, the two firms must be considered as separate and distinct from each other. The firm constituted under the deed of 1956 subsisted during the account year relevant for the assessment year 1959-60, while the firm constituted under the deed of 1958 commenced its existence from the opening day of the account year relevant for the assessment year 1960-61. It is apparent that the application for renewal of registration could have been made only by the firm constituted under the deed of 1956. It was t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wo firms were distinct from each other ; indeed one followed the other in point of time. The firm constituted under the deed of 1956 was dissolved and was followed by the firm constituted under the deed of 1958. Moreover, the former firm having been dissolved already before the application was made; it was illogical to expect that its constitution would remain unaltered on the date of the application. The law contemplates an application under section 26A in respect of those firms also which have been dissolved. That consideration is sufficient to demonstrate that in construing the words " remain unaltered " in the prescribed form of the application to mean " remain unaltered on the date of the application ", the Tribunal has imposed a construction not warranted in law. It seems to us that the words " remain unaltered " must be read in relation to the previous year relevant to the assessment year for which registration, or renewal of registration, is claimed. It is with reference to the income of that previous year that a firm seeks the benefit of section 26A and, accordingly, the requirements of paragraph 2 of the prescribed form of the application should be so construed. Before ..... X X X X Extracts X X X X X X X X Extracts X X X X
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