9911796707
TMI Blog2001 (1) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Inspecting Assistant Commissioner (Assessment)?" The dispute relates to the assessment year 1973-74. The background facts sans unnecessary details are as follows: The assessee had filed return of income disclosing nil income for the assessment year in question. In Part III of the return, a sum of Rs.7,12,460 was claimed as exempt under section 176(4) of the Act. It was stated that the partnership had been dissolved on January 24, 1968. The amount in question had been received by Charanjit Lal, proprietor of the concern, C. Lyall and Co. It was the assessee's stand that the amount was in lieu of the claim filed by the sub-partnership which had been brought into existence by Charanjit Lal to execute the contract allotted to hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred an appeal before the Commissioner of Income-tax (Appeals) (in short "the CIT (A)"). The stand of the assessee before the Commissioner of Income-tax (Appeals) was that the firm had already been dissolved on April 13, 1964, and on that date the balance-sheet had been drawn up. The agreement to dissolve the firm was oral and later on it was considered expedient to reduce the terms to writing and a written deed of dissolution was drawn up on August 24, 1968. The preamble of the said deed of dissolution indicated that the work for which the partnership had been brought into existence was completed and, therefore, the partnership has to be dissolved on April 13, 1964. The Commissioner of Income-tax (Appeals) noticed that the indication rega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lt that nothing can be gained by keeping in existence the firm which ceased to do any business except that it was to pursue arbitration which could be easily done by providing for the same in the dissolution deed. It was not necessary for the agency to continue the partnership. The Tribunal recorded a finding that dissolution of the firm was normal and a bona fide act. It was also observed that the provisions of section 176(3) which had been brought into operation with effect from April 1, 1976, would have no application to the facts of the case. Accordingly, the assessee's stand was upheld and the Revenue's appeal was dismissed. On being moved for reference, the question as set out above has been referred for the opinion of this court. W ..... X X X X Extracts X X X X X X X X Extracts X X X X
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