TMI Blog1990 (11) TMI 123X X X X Extracts X X X X X X X X Extracts X X X X ..... ions under section 256(1) of the Income-tax Act, 1961 : "(1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that, on the retirement of the two partners, namely, S/Shri Jagjiwan M. Patel and Rashik Lal G. Singhavi, there would be succession and not a change in the constitution of the firm ? (2) Whether, on the facts and in the circumstances of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccordingly. On appeal, the Appellate Assistant Commissioner directed that there ought to be two assessments. He was of the opinion that since after retirement of two partners, only one partner remained, the partnership firm came to an end and that the one constituted later was a new firm which succeeded to the old firm. The Department appealed. The Tribunal held, following the decisions of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ub-section (2) reads as follows : "(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 of the persons who were partners of the firm before the change continue as partner or partners after the change ; or (b) where all the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e light of sub-section (2)(a) of section 187 of the Income-tax Act, we cannot but say that it is a case of reconstitution. Had there been a deed of dissolution of partnership on June 30, 1971, and a new partnership deed executed thereafter between Kirti Kumar Shah and Smt. Ele Ben R. Shinghavi, it would probably have been a case of succession. In this view of the matter, the Tribunal was not right ..... X X X X Extracts X X X X X X X X Extracts X X X X
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