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TMI Blog1997 (12) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... artnership on the death of Shri B. G. Mathur on February 16, 1976, and that the second partnership consisting of Smt. Daya Pyari Mathur and Sri G. C. Mathur, which took over the business could be assessed in accordance with section 188 of the Income-tax Act, 1961?" (2) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was correct in law in upholding the Appellate Assistant Commissioner's view that the income of the two periods could not be clubbed and that two separate assessments should be made for the two periods?" The facts are that at the beginning of the previous year relevant to the assessment year 1977-78 with which we are concerned, the firm, Kohinoor Jewellers, was constituted by two ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the firm will not dissolve despite the death of a partner. No such case was taken up at any stage either before the Tribunal or other authorities. The question that falls for consideration is whether, on the facts of the case, it is a case covered by section 188 of the Act or a case to which section 187 will apply. Section 188 of the Act states that where a firm carrying on a business is succeeded by another firm and the case is not covered by section 187, separate assessments have to be made on the predecessor firm and the successor firm. Section 187, inter alia, provides that where, at the time of making an assessment, it is found that a change has occurred in the constitution of the firm, the assessment will be made on the firm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect from which the case can also be looked into. Once a firm is dissolved either by an agreement or by operation of law, the question of reconstitution does not arise even where the new firm has a common partner or partners and takes over the same business. A firm in order to be reconstituted must remain in existence. In the present case, the firm was constituted only by two partners. One of them had died during the currency of the previous year relevant to the assessment year in question. The legal consequence was that upon the death of a partner out of the two only one partner was left and one man cannot constitute a firm. The firm automatically came to an end. In an identical situation the Full Bench of this court in Dahi Laxmi Dal Facto ..... X X X X Extracts X X X X X X X X Extracts X X X X
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