1996 (1) TMI 12 - SC - Income Tax

Death of one partner - firms claimed that they were dissolved on the death of the said partner and fresh partnerships wee entered into - having regard to the provisions of section 187(2) (amended retrospectively) of the Income-tax Act the Tribunal is correct in law in holding that consequent to the death of the partner Alagappan on May 28 1976 two separate assessments and not one assessment should be made for the assessment year 1977-78

Summary

The Supreme Court ruled that in a case where a partner dies, resulting in the dissolution of a firm, separate assessments should be made for the new partnerships formed. This decision was based on a retrospective amendment to section 187 of the Income-tax Act, excluding the applicability of the clause regarding firm constitution changes in such dissolution cases. The Court ruled in favor of the assessee, against the Revenue.