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TMI Blog1940 (9) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... a cinema film called "Pathi Bhakthi." The partnership continued until the month of May of the following year, when Venkatarama Ayyar retired from the partnership and was paid the amount of the profits which represented his share, namely the sum of ₹ 9,524. Thereafter the film was exhibited by the assessee for his own benefit. For the assessment year 1937-38 the Income-tax authorities assessed Venkatarama Ayyar in respect of this sum of ₹ 9,524 and he paid the tax, but later the income-tax authorities considered that they were wrong in so doing, and to have the question settled, the Commissioner of Income-tax has, under the provisions of Section 66 (2) of the Act, referred the following question :- "Whether the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that where a partner carries on the business of partnership after dissolution he does "succeed" within the meaning of Section 26 (2). These cases are Karuppaswami Moopanar v. Commissioner ofIncome-tax, Madras [1934] 2 ITR 284; 7 ITC 283, and Commissioner of Income-tax, Madras v. Muthkaruppan Ghettiar [ 1939] [ 1939] Mad. 269; 7 ITR 29 . For the assessee it has been suggested that the judgments in these cases cannot be regarded as deciding the question because this proposition was not disputed. It is true that the argument which has been addressed to this Court was not addressed to the Court in the two cases mentioned; but the cases cannot be ignored for this reason. Obviously it was not considered to be worth while taking the poin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and severally liable for the amount of the tax payable in respect of the income, profits and gains of the firm." This section only applies when there has been a discontinuance of the business, which is not the case here. The section says that if a business is discontinued the partners shall nevertheless be jointly and severally liable for the profits which had been earned. We are not concerned here with a case where there had been a discontinuance of the business. We are concerned with a case where the same business has been carried on by one of the partners, and carried on without any break. In such a case the section which is applicable is Section 26 (2) and not Section 44. For the reasons indicated we answered the question referr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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