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TMI Blog1984 (11) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... n 5-3-1982 by public auction. On behalf of the assessee, it was contended even before the ITO that the firm was dissolved long time back and there could be no assessments on the firm. The ITO, however, mentions that provisions of section 189 of the Income-tax Act, 1961 ('the Act') are very clear and, therefore, passes an order on the assessee-firm. 2. Shri Ruhela, submitted before the Commissioner (Appeals), that the assessments of the firm were done up to 1957-58 only. There was no material on the record to show that any business was carried on thereafter. No assessments were done thereafter, as the factory was closed all the time. It was also submitted that soon-after the discontinuance of the business, the firm also stood dissolved. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... auction, they having died much before the assessment of the firm was held to be invalid. 3. Before us, Shri Ruhela submitted a copy of the IAC's report dated 29-9-1983 wherein he had categorically stated that there was no dissolution of the firm. According to this report, only business seems to have been discontinued. Shri Ruhela relied on the provisions of section 47 of the Indian Partnership Act, 1932, as also the ratio of judgment in Laxminarayan Sawalram v. Dwarkaprasad Rudmal AIR 1964 MP 55 that till the firm is fully dissolved and the assets are settled, the firm shall be deemed to be in existence. 4. On behalf of the assessee, Shri Choudhary, the learned representative for the assessee, submitted that the partnership was at will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... According to this section, a partnership at will can be dissolved by a notice served by a partner or another partner. In the instant case, the partner, who can serve such a notice died in sequence. Thus, there is no partner remaining, who could issue or the dead partner cannot issue any notice. In such a situation, section 42 of the Indian Partnership Act, clause (c) would come into play, which provides for the dissolution of the firm by the death of a partner. Since the partners have died, the natural corollary is that the firm stood dissolved from the date of death of the partners. Therefore, as on March 1982, when the property of the firm was sold for recovery of taxes, there was no firm in existence by the name of United Trading Co. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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