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Issues:
1. Whether the Income-tax Appellate Tribunal was justified in holding that the income for two periods cannot be clubbed together, and separate assessments should be made for the two periods? Analysis: The case involved a partnership firm where one of the partners passed away, leading to the constitution of a new firm. The primary issue was whether the income for the two periods should be clubbed together or assessed separately. The Income-tax Officer had initially clubbed the income of both periods, leading to an appeal by the assessee. The Tribunal ruled that the income for the two periods cannot be clubbed and separate assessments should be made for each period. The Tribunal based its decision on the dissolution of the first firm upon the death of the partner and the subsequent constitution of a new firm. The Income-tax Officer had also granted fresh registration to the newly constituted firm, treating them as separate legal entities. The court referenced the Supreme Court's decision in Wazid Ali Abid Ali v. CIT, which established the principle that income for different periods cannot be clubbed in cases of firm reconstitution. Additionally, the court disagreed with the Full Bench of the Madhya Pradesh High Court's decision in Girdharilal Nannelal v. CIT, emphasizing that the Income-tax Act governs matters related to income assessment for firms. The court also cited the Delhi High Court's decision in CIT v. Sant Lal Arvind Kumar, supporting the concept of separate assessments in cases of firm succession due to partner changes. In conclusion, the court upheld the Tribunal's decision, ruling in favor of the assessee and against the Department. The judgment emphasized the legal principles governing firm reconstitution and the necessity for separate assessments in such cases. The court directed the transmission of the judgment to the Assistant Registrar of the Income-tax Appellate Tribunal, Patna Bench, in accordance with the provisions of the Income-tax Act.
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