1953 (9) TMI 2 - SUPREME COURT

Whether the High Court upon Section 25(4) of the Act was erroneous and was not warranted by the language of the section and that by reason of the change in the composition of the firm the same firm did not continue throughout and hence there was no right to relief under Section 25(4) of the Act in the changed firm?

Held that:- The section does not regard a mere change in the personnel of the partners as amounting to succession and disregards such a change. It follows from the provisions of the section that a mere change in the constitution of the partnership does not necessarily bring into existence a new assessable unit or a distinct assessable entity and in such a case there is no devolution of the business as a whole.The partners of the firm are distinct assessable entities, while the firm as such is a separate and distinct unit for purposes of assessment. To all intents and purposes the firm as reconstituted was not a different unit but it remained the same unit in spite of the change in its constitution.

No substantial grounds for disturbing, the opinion given by the High Court on the question submitted to it. The appeal therefore fails and is dismissed.