9911796707
TMI Blog1983 (3) TMI 140X X X X Extracts X X X X X X X X Extracts X X X X ..... The appeal relates to the assessment year 1980-81 for which the accounting period was from 2-2-1979 to 27-1-1980. The facts of the case have been elaborately stated in the orders of the authorities and, therefore, need not be repeated. The erstwhile partnership firm was assessed in the status of 'registered firm' up to the assessment year 1979-80 and during the previous year relevant for the assessment year 1980-81 one of the partners, Shri V.S. Lakshmanan, died on 21-4-1979. The issue involved is whether there is dissolution of the firm on 21-4-1979 and, therefore, there has been succession to the business or whether there is a change in the constitution of the firm and the income of the two periods should be clubbed in a single assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be made or not. In this connection, the point whether the death of a partner results in dissolution of the firm or not comes up for consideration. On this point also there is conflict of decisions which fact is admitted by both sides. The case of the Commissioner, however, was that although there was no specific provision in the deed of partnership to the effect that death of a partner did not dissolve the firm, nevertheless such intention of the partners was not explicit in the recital of the deed of partnership but could be implicit and could be inferred by the terms of the partnership deed subsequently drawn up or by the conduct of the surviving partners. Such intention of the partners, according to the Commissioner, was manifest in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he authorities, we find that insofar as the jurisdiction of the Commissioner invoking the powers under section 263 has not been challenged by the assessee at least on the point of valuation of closing stock and, consequently, we uphold the validity of the jurisdiction of the Commissioner. Although, the Commissioner has invoked the jurisdiction on two points, he has confined his direction only to the clubbing of income of both the periods, for making single assessment for the entire previous year. Therefore, we shall confine our attention only to the specific direction given by the Commissioner. The facts of the case clearly show that in the deed of partnership dated 2-2-1976 there was no specific provision that in the event of death of any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s filed after the death of the partner and the various recitals in the subsequent deed of partnership and the course of conduct pointed out by the Commissioner would only show the intention of the remaining partners and not the intention of all the partners prior to the date of death of the partner, Shri Lakshmanan. In other terms, we hold that unless there is prior explicit or implicit agreement among all the partners including the deceased partner, the conduct of the remaining partners would not amount to a contrary agreement or intention to defeat the operation of the provisions of section 42(c) of the Partnership Act. 5. In this connection, we would like to touch upon the relevant decisions of the Courts relied upon by the Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bring about the dissolution of the partnership. But we are not prepared to accept the further argument of the learned counsel for the revenue that for the purpose of section 187 even in cases. where there is no contract to the contrary against the dissolution of the firm by death of a partner it will amount to a change in the constitution of the firm within the meaning of section 187(2)...." [Emphasis supplied) Form the above extracts, the portion italicised by us clearly shows the view of the Hon'ble High Court to the effect that where there is no contract to the contrary against the dissolution of the firm by death of a partner, it would not amount to a change in the constitution of the firm within the meaning of section 187(2). As reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovision that the firm will continue undissolved notwithstanding the death of any of the partners. The result of it was that section 42(c) of the Partnership Act, 1932, came into operation, and the death of Govindaraja Mudaliar brought, about the dissolution of the firm. Once the firm came to an end, what happened subsequently was merely the succession of a new firm to the business in question, and will not constitute a change in the constitution of the firm as contemplated by section 187 of the Act. Therefore, even with regard to the firm of V. Muniswamy Mudaliar Company, the Tribunal was right in holding that no single assessment could be made under section 187 of the Act, and only two assessments could be made for the two periods on the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
