9911796707
TMI Blog1996 (1) TMI 109X X X X Extracts X X X X X X X X Extracts X X X X ..... inding that from the conduct of the partners, it is very clear that there was a dissolution of the firm which had come into existence on April 16, 1956 ? " Although a third question was framed, it has not been referred. The assessee-firm was constituted under a deed of partnership dated April 16, 1956, in the name and style of "Paper Mart". One of the four partners, one Sri K. T. Paul, expired on March 24, 1977, According to the deed of partnership, he had three shares whereas the other partners, namely, K. T. Cherukutty had one share, K. T. Francis had two shares and lastly, K. T. Antony had one share. On that day (March 25, 1977) under an entirely new and separate deed of partnership a new partnership of the remaining three partners ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rein that the passing away of one of the partners of the earlier firm, Sri K. T. Paul, was the occasion to dissolve the earlier firm. The document also makes it abundantly clear that in the process of dissolution it is not that the share of the deceased partner is looked after in the process of dissolution, but even the shares of the remaining three partners have also been separated by metes and bounds carefully recording the terms and conditions in regard thereto also. On the factual matrix the two documents have made it abundantly clear that the earlier firm has ceased to exist on its partners having been separated by metes and bounds although the occasion was the death of one of them. A new partnership has come into existence. It is in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... meeting the claims of the heirs and legal representatives of the deceased partner Paul and then agreeing to come together on a new and entirely independent contractual basis forming partnership afresh. In this background, it is necessary to consider the emphasis placed on clause 2 of the original partnership deed. The contention of the Department was that as a result of the said clause, the dissolution could not be considered as permissible. Even the appellate authority has relied on the approach of the Income-tax Officer with reference to clause 2 carving out an exception from the general principles of the law of partnership regarding the dissolution of a firm in the event of the death of a partner. We had the advantage of getting the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e aspects are available, it is clear that there would be two separate assessment proceedings. The decision of the Supreme Court in Wazid Ali Abid Ali v. CIT [1988] 169 ITR 761 directly deals with the situation in regard to the partnership deed even containing a clause providing that the firm shall not be dissolved on the death of a partner, but shall continue with remaining partners and the heir of the deceased partner agreeing to join. The death of the partner during the year, closing of accounts and crediting would definitely result in amounting to dissolution requiring separate assessment to be made up to the date of death. It is also clear that the clause in the partnership deed to the contrary that the firm shall not be dissolved on ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
