TMI Blog1977 (3) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... ll be dissolved automatically but the surviving partner may continue the business by admitting the legal heir of the deceased partner if the legal heir elects so. This firm was granted registration for the earlier years. Shri Jainarain Tamakuwala died on 17th Nov., 1973, about two weeks before the close of the accounting year on 31st December. On 9th Jan., 1974, another partnership deed was executed between Sri Nathmal Chitlangia, Smt. Sushila Devi Tamakuwala, wife of the deceased partner and Shri Narayan Prasad Tamakuwala, brother of the deceased partner. the preamble of this deed among other things provided that the earlier firm had dissolved on 17th Dec., 1973 and a fresh partnership had come into existence between these partners. This p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the view that there should have been an application for registration as required under s. 148(8). For this reason he refused the continuation of registration of the firm. 4. The learned counsel for the assessee has submitted that the firm consisted of two partners and after the death of Shri Jainarain Tamakuwala no partnership could subsist as only one partner was left. He also submitted that on the death of a partner, the partnership dissolved as there was no stipulation to the contrary in the partnership deed. He submitted that in these circumstances there was a dissolution of the partnership and a new deed brought into existence, a fresh partnership which is also clear from the terms of that deed. He submitted that the AAC wrongly rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case of Shiv Ram Poddar vs. ITO(2) but that case is not at all applicable in the present circumstances. That case dealt with cases where even after dissolution of a firm the business continued. In the present case, there is no question of discontinuance of business and the manner in which the assessment has to be made where there is no discontinuance. S. 187(2) provides as under: "(2) For the purposes of this section, there is a charge in the constitution of the firm: (a) If one or more of the partners case to be partners or one or more new partners are admitted, in such circumstances that one or more of the persons who were partners of the firm before the change continue as partner or partners after the change; or (b) Where al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business, that will be a case of succession governed by s. 188 of the Act, even though some of the partners of the two firms are common. In that case also, the old firm was constituted by two partners. One of them died and there was no stipulation in the partnership deed that the firm shall not stand dissolved on the death of the partner. Their Lordships observed that even if there had been such a stipulation, the firm could not have been saved from dissolution, because, after the death of one partner only one partner was left and one man cannot constitute a firm. It was, therefore, held that the firm automatically came to an end. It was in these circumstances that their Lordships held that s. 188 was applicable. Their Lordships have consi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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