1984 (5) TMI 22

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... en an assessee partnership firm which is registered is dissolved and, consequently, a new firm takes over the business. The question referred to us is as follows : "Whether, on the facts and in the circumstances of the case, the Tribunal was legally right in holding that it was not a case of a change in constitution under the proviso to section 187(2) of the Income-tax Act, 1961, and in directin .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... the operation of the Partnership Act to dissolve the firm. Consequently, the firm would stand dissolved on May 15, 1971, under s. 42 of the Partnership Act. On May 17, 1971, a new partnership firm between the remaining four partners of the original firm and the son of Shri Dwarka Dass, Shri Mohan Lal was formed. Shri Mohan Lal was given the same share as his father had in the original firm. Thus, .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... to this sub-section which excludes its operation when there is a change in the constitution of the firm. Reference is also made to sub-s. (8) of s. 184 which can conveniently be reproduced here. It reads : " (8) where any such change has taken place in the previous year, the firm shall apply for fresh registration for the assessment year concerned in accordance with the provisions of this secti .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... . In the case of (a), i.e., reconstitution, the firm remains alive but there is a change therein, and it appears that in law there should be two assessments on the two firms. But, s. 188 seems to visualise that a single assessment has to be made. Whether the income is to be clubbed or this is done for convenience, we refuse to answer in this case because the question does not arise. As far as we .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... der s. 187 are changes which do not bring about the dissolution of the firm, and s. 189 deals with those cases where a firm is dissolved and s. 188 deals with the question of succession which may nor may not be to a firm which has common partners; it may be a completely different firm or it may be a firm which has many common partners. When the three sections are harmoniously read together, the me .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X