9911796707
TMI Blog1996 (1) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... od from January 13, 1974, to June 30, 1974, as the assessee's case did not fall within the provisions of section 187(2) of the Income-tax Act, 1961 ? " The relevant assessment year is the assessment year 1975-76. The relevant accounting year ended on June 30, 1974. The assessee is a partnership firm. It was constituted under a deed of partnership dated July 18, 1968. Its three partners were Mrs. Ellen Keki Modi, Mr. Rustom Keki Modi and Ms. Maneck Keki Modi. Mrs. Ellen Modi died on January 12, 1974. There being no provision in the deed of partnership contemplating continuance of the partnership in the event of the death of a partner, the partnership stood dissolved. No deed of dissolution was executed but the surviving partners executed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id not fall within the expression " change in the constitution of the firm " under section 187 and directed the Income-tax Officer to make assessments for the two aforementioned periods of the relevant previous year. Section 187, so far as is relevant, reads thus : " 187. (1) Where, at the time of making an assessment under section 143 or section 144, it is found that a change has occurred in the constitution of a firm, the assessment shall be made on the firm as constituted at the time of making the assessment. (2) For the purposes of this section, there is a change in the constitution of the firm-- (a) if one or more of the partners cease to be partners or one or more new partners are admitted, in such circumstances that one or more ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ates that where a firm carrying on a business is succeeded by another firm and the case is not covered by section 187, separate assessments have to be made on the predecessor firm and the successor firm. Section 187 says that where, at the time of making an assessment, it is found that a change has occurred in the constitution of a firm, the assessment shall be made on the firm as it is constituted at the time of making the assessment. "Change in the constitution of the firm" is defined for the purpose. The relevant part of the definition states that if one or more of the partners cease to be partners 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly to the facts of this case. There, the High Court found on examination of the facts of that case, that the assessee's contention was right that the firm as found by the Tribunal was dissolved and the transactions were carried on with the remaining parties in the course of winding up and for realisation of its dues. The High Court accordingly answered rightly in the affirmative and in favour of the assessee. There was, in fact, a dissolution as found by the Tribunal and on the facts and circumstances of that case and after the dissolution, the firm ceased to exist and there should be two separate assessments. The High Court was right in answering the question as it did. It appears to us that the High Court was also right in answering the s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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