TMI Blog1940 (9) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... r who continues the partnership business after the dissolution of the partnership succeeds to the business within the meaning of Section 26 (2) of the Indian Income-tax Act, 1922. On the 16th September 1935 the assessee and one Venkatarama Ayyar entered into a partnership for the production and exhibition of a cinema film called Pathi Bhakthi. The partnership continued until the month of May of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 which represents the ex-partner's share of the profits of the film business . In his statement of the case the Commissioner has very properly stated that should the Court answer this question against the assessee he would exclude the sum of ₹ 9,524 from the assessment of Venkatarama Ayyar, who, of course, would thereupon be entitled to a refund. Section 26 (2) reads as follows : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income-tax is an entity quite distinct from the partners who compose it. In two cases which have come before this Court it has been accepted that where a partner carries on the business of partnership after dissolution he does succeed within the meaning of Section 26 (2). These cases are Karuppaswami Moopanar v. Commissioner ofIncome-tax, Madras [1934] 2 ITR 284; 7 ITC 283, and Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rodgers and Eller v. Garter [1927] 11 Tax Cas. 565. In the course of his arguments Mr. Ramaswami Ayyar has suggested that the decision of this Court in Kesava Rao v. Commissioner of Income-tax, Madras [1935] 59 Mad. 337; 3 ITR 339, has application here, but this cannot be accepted. There the Court was merely concerned with the question whether there could be succession within the meaning of Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able for the amount of the tax payable in respect of the income, profits and gains of the firm. This section only applies when there has been a discontinuance of the business, which is not the case here. The section says that if a business is discontinued the partners shall nevertheless be jointly and severally liable for the profits which had been earned. We are not concerned here with a cas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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