TMI Blog1984 (2) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... periods July 9, 1967, to December 42, 1967, and December 13, 1967, to Jane 26, 1968, respectively, the incomes of which required to be assessed separately ? M/s. Bal Kishan Dass Hari Kisan Dass, the firm, was constituted by a deed of partnership dated June 26, 1963. It consisted of four partners, namely, Devi Sahai, Bal Kishan, Jagdish Prasad and Ram Gopal. Jagdish Prasad was stated to be a partner in his capacity as a trustee of Radhey Sham Trust. It appears from the deed of partnership dated June 26, 1963, referred to above, that the firm was earlier constituted by a deed of partnership dated September 30, 1957, and the partners were Devi Sahai, Jagdish Prasad and Bal Kishan Dass Jagdish Prasad was acting for and on behalf of Radhey Sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the other for the period December 13, 1967, to June 26, 1968. The ITO framed a single assessment in respect of both these returns of income. On appeal, however, the AAC accepted the fact of dissolution of the firm on December 12, 1967. She observed that a new partnership was constituted on December 13, 1967, and that separate books of account were maintained by the two firms. She held that it was a case of succession on account of dissolution of the firm and not merely a change in the constitution of the firm. She, therefore, directed the ITO to frame two separate assessments for the two periods. Thus, though the ITO held it to be a case falling under s. 187(2) of the Act, the AAC held it to be covered by s. 188 of the Act. To complete the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an appeal before the Income-tax Appellate Tribunal which agreed with the order of the AAC, but, nevertheless, was of the view that a question of law did arise for consideration of the High Court. A host of authorities were cited before us to canvass the proposition as to whether the provisions of the Partnership Act were applicable and whether it was a case of dissolution of the firm or a mere change in the constitution of the firm. The facts in the present case leave no manner of doubt that the earlier partnership was dissolved on December 12, 1967, and the deed of dissolution dated January 10, 1968, is a clear pointer to that. We cannot read into this that it was a case of retirement of a partner. Clearly, the parties themselves intend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der s. 43 a partnership at will can be dissolved by any partner giving notice in writing to all the other partners of his intention to dissolve the firm and upon such notice being given the firm gets dissolved as from the date mentioned in the notice as the date of dissolution and, if no date is so mentioned, as from the date of the communication of the notice, while s. 44 contemplates dissolution of a firm by and under orders of the court in certain contingencies mentioned therein. It is quite conceivable that in cases of dissolution of the firm brought about by a notice under s. 43 or by an order of the court under s. 44 some of the erstwhile partners may take over the assets and liabilities and carry on the same business by constituting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat on the death of the partner the earlier firm had been dissolved and consequently there were two separate and independent firms in existence for the two periods and they were to be assessed separately. The ITO, however, took the view that it was only a change in the constitution of the firm within the meaning of s. 187 of the Act, the death of one of the partner s notwithstanding. After a detailed examination of the facts and the law on the subject, this court came to the conclusion that it was a case of succession and not one of change in the constitution, and that separate assessments had to be made for the two periods. The court referred to s. 42(c) of the Indian Partnership Act, 1932, and held that in view of this position under the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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