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TMI Blog2006 (9) TMI 133X X X X Extracts X X X X X X X X Extracts X X X X ..... 43B of the Act? 2. Whether, on the facts and circumstances of the case, the Tribunal was legally justified in confirming the Commissioner of Income-tax (Appeals)'s finding that the proviso to section 187(2) of the Act was applicable and there was a dissolution of the firm on the death of one of its partners on June 23, 1985, in spite of the fact that clause 10 of the partnership deed dated April 27, 1985, specifically provided that in the event of the death of any partner the firm would not be dissolved? 3. Whether, on the facts and in the circumstances of the case, the Tribunal was legally justified in coming to the conclusion that the partners of the firm decided to dissolve the firm on June 23, 1985? The reference relates to the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, therefore, he directed the Assessing Officer to frame two assessments for each of the accounting periods, referred to above. Being aggrieved with the order passed by the Commissioner of Income-tax (Appeals), the Revenue came up in appeal before the Tribunal and before whom it was submitted that in view of the specific condition of the old partnership deed, the partnership could not be deemed to have been dissolved on the death of the partner on June 23, 1985, and the business of the assessee-firm should be deemed to have been continued by surviving partners and, therefore, there should be only one assessment in the case. The Tribunal, however, rejected the aforesaid argument by taking specific note of the proviso to section 187(2) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us, even on the death of one of the partners on June 23, 1985, the legal effect of the partnership firm would be that it should be deemed to have been continued by the surviving partners and did not stand dissolved. It would be a case of section 187 and not section 188 of the Act. We are fortified in our view by the decision of the apex court in the case of CIT v. Empire Estate [1996] 218 ITR 355, wherein the apex court had held that if there is no such provision in the partnership deed for continuance of partnership in the event of death of a partner in that event when surviving partners continue the business in partnership section 188 is attracted for there is a succession of one by another partnership. We, accordingly, answer the remai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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