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TMI Blog1989 (5) TMI 124X X X X Extracts X X X X X X X X Extracts X X X X ..... of which firm Gokhuldas and Brothers, Ujjain, was a branch. The firm Kanhaiyalal Hajarilal, Shajapur, was dissolved in about 1966 and two separate firms in the same names i.e. to say Gokuldas and Brothers. Ujjain, and Kanhaiyalal Hajarilal, Shajapur, were constituted. The partners of the firm Goukldas and Brothers, Ujjain, independently constituted w.e.f. 1st Dec., 1966 were S/Shri Jitmal, Laxminarayan, Gokulds and Ramchandra. The said partnership was evidenced by a deed of partnership dt. 1st Decision., 1966. The firm M/s. Kanhaiyalal Hajarilal, Shajapur, was also constituted afresh of which, inter alia, the partners were Shri Indermal and Shri Gokuldas. These two firms were again dissolved on 27th July, 1979. They were reconstituted w.e. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther firm or dissolution of a firm and was change in constitution of the firm since out of the four partners one partner Shri Gokuldas retired. Thus, in his opinion one single assessment should have been made framed for the asst. yr. 1980-81 for the entire period of 12 months from Diwali 1978 Diwali, 1979. He in that regard placed reliance upon the judgement of the Hon'ble M.P. High Court in Girdharlal Nannelal vs. CIT (1984) 38 CTR (MP) 258 (FB) : (1984) 147 ITR 529 (MP) (FB). He therefore set aside the assessment and directed the ITO for de novo assessment in accordance with law. 2.4 Next we come to assessment for the asst. yr. 1981-82. The ITO completed the assessment on 23rd April, 1984. He recorded a finding that it was change in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rected the ITO to allow registration. Aggrieved by the said order of the AAC, the Department is in appeal. 3. We heard the learned representative of the parties at length. It appears that the controversies hinge on proper interpretation of ss. 187, 188 and 189 of the IT Act. According to s. 187 there is a change in the constitution of the firm if one or more of the partners ceased 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. The question is whether such a change should in all events be taken as mere change in the constitutions of a firm or may be taken under earlier circumstan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce and not to a case where under the law one firm has ceased to exist and another has come into existence. It appears to us that to import any such concept in s. 187 would be to travel beyond the ordinary and natural meaning of the words used in the context of the partnership law that is clearly applicable and that has not been excluded by reason of any specific provision. The judicial decisions deciding to the contrary appear to have read into the language of sub-s.(2) of s. 187 an implication that what all has to be done to compare the partners before a particular event and the partners after the particular event irrespective of whether the firm has continued or not and to have envisaged the definition in s. 187(2) as intended to transce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench of the Same High Court in Girdharilal Nannelal vs. CIT. The decisions of the other High Courts in line with the said view have also been referred to by the Full Bench. There is also reference to the decisions of the other High Courts which took contrary view. Among such cases, there is a case of CIT vs. Sant Kumar Arvind Kumar a Delhi High Court from which the observations have been excepted above. 5. This controversy has been set at rest by the Hon ble Supreme Court in the case of Wazid Ali Abid Ali vs. CIT (1988) 67 CTR (SC) 43 : (1988) 169 ITR 761 (SC) in which he view taken by the Hon ble Delhi High Court in the case of CIT vs. Santlal Arvind kumar has been approved and the view taken by the Full Bench of the Madhya Pradesh High ..... X X X X Extracts X X X X X X X X Extracts X X X X
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