9911796707
TMI Blog1996 (10) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... lding that two separate assessments should be made, one for the period April 1, 1974, to January 31, 1975, and another for the period from February 1, 1975 to March 31, 1975, for the assessment year 1975-76 in the assessee's case ? 2. Whether the Appellate Tribunal's view that there was only a succession under section 188 of the Income-tax Act and not a change in the constitution of the firm within the meaning of section 187(2) of the Income-tax Act, 1961, is sustainable in law ?" The assessee is a registered firm, carrying on business in paper, board, etc. On April 1, 1974, the firm consisted of four partners, while fifteen new partners were inducted into the firm by reconstitution of the firm on December 1, 1974. The firm, therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry 1, 1975. However, the Department was of the view that there was no dissolution, but there was only continuation of the old firm, and, therefore, two assessments are not possible. However, the Commissioner of Income-tax (Appeals) accepted the view taken by the Inspecting Assistant Commissioner, and held that only one assessment should be made for both the periods. The Commissioner of Income-tax (Appeals), followed the decision of the Andhra Pradesh High Court in Addl. CIT v. Visakha Flour Mills [1977] 108 ITR 466 [FB]. Aggrieved, an appeal was filed before the Appellate Tribunal. The Appellate Tribunal pointed out that inasmuch as there was dissolution of the erstwhile firm under a deed of dissolution, dated January 31, 1975, two assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said that the erstwhile firm is continuing. Even though four of the partners of the erstwhile firm expressed their desire to retire from the partnership firm and in pursuance of that, all the partners in the erstwhile firm decided to dissolve the firm and accordingly a deed of dissolution was drawn up. It was therefore stated that after the dissolution, it cannot be said that the erstwhile firm is continuing. We have heard the rival submissions. The facts on record would go to show that on April 1, 1974, the firm consisted of four partners, while fifteen new partners were included in the new firm by reconstitution of the firm on December 1, 1974. Thereafter, the firm consisted of nineteen partners. There was a deed of dissolution, dated J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts, the Supreme Court in CIT v. Amritlal Nihalchand [1992] 196 ITR 346, held that there is no succession while there was a deed of dissolution and clubbing of the income of the two periods was wrong. According to learned standing counsel appearing for the Department, there is no notice by the partners prior to dissolution as per the provisions of section 43 of the Partnership Act. But inasmuch as in the present case all the partners decided to dissolve the firm and in pursuance of that, a dissolution deed was drawn up on January 31, 1975, as per the provisions contained in section 40 of the Partnership Act, no notice under section 43 of the Partnership Act is necessary. Accordingly, we hold that there is no infirmity in the order passed by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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