9911796707
TMI Blog1973 (8) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... one assessment should be made? " The assessee is a partnership firm carrying on business in the manufacture of agarbatties. The assessment year is 1966-67 for which the relevant previous year is the year ended March 31, 1966. There was a change in the constitution of the firm on September 1, 1965. Before the said date there were six partners in the firm. Thirteen more partners were introduced into the firm with effect from September 1, 1965. The assessee filed a return on August 1, 1966, declaring an income of Rs. 1,12,628. However, the said return was revised and two returns were filed on October 31, 1966, one return was for the period ended August 31, 1965, and the other was for the period from September 1, 1965, to March 31, 1966. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the period April 1, 1965, to August 31, 1965, was Rs. 74,443 ; the net taxable income for the second period from September 1, 1965, to March 31, 1966, was Rs. 68,913. On the Income-tax Officer granting registration to the firm the income of the two periods was apportioned amongst the partners. Section 182 read with section 4 of the Act levies a tax on registered firms. The income-tax together with surcharges, etc., payable by the firm was determined at Rs. 14,127. That amount was fixed on the basis of the total taxable income of the firm which was Rs. 1,43,356. It was urged by Sri K. Srinivasan, learned counsel for the assessee, that every change in the constitution of a firm brings into existence a new firm ; that although by virtue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f a firm, the assessment shall be made on the firm as constituted at the time of making the assessment : Provided that- (i) the income of the previous year shall, for the purposes of inclusion in the total incomes of the partners, be apportioned between the partners who, in such previous year, were entitled to receive the same ; and (ii) when the tax assessed upon a partner cannot be recovered from him, it shall be recovered from the firm as constituted at the time of making the assessment... 188. Succession of one firm by another firm.-Where a firm carrying on a business or profession is succeeded by another firm, and the case is not one covered by section 187 separate assessments shall be made on the predecessor firm and the successor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the total amount of tax will be much less than what it would be if the total net taxable income for the entire accounting period is taken into account and the assessment order is made. In the reference before us, we are not concerned with the allocation of income between the parties. That question was not before the Tribunal. The only question that was raised before the Tribunal was whether there shall be two separate assessment orders. The learned counsel for the assessee also argued that unless two separate assessments are made, the income cannot be properly apportioned between the two sets of partners. In our opinion, the contention of the learned counsel is clearly untenable. The learned counsel for the department submitted that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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