9911796707
TMI Blog1985 (1) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... ome-tax Act, 1961, and that, therefore, only one assessment should have been framed on the firm for the entire accounting period corresponding to the assessment year 1970-71. The petitioner-assessee is a firm. Its accounting year for the assessment year 1969-70 ended on Diwali 1968 and the following persons were the partners of the firm on that date : 1. Fatehlal 2. Niranjan Kumar 3. Nirmal Kumar One of the partners, namely, Shri Fatehlal, died on July 14, 1969, and on his death, his widow, Smt. Asha Kumari, was taken in as a partner and she was allotted the (same) share of profit as was being held by her deceased husband. This is evidenced by the partnership deed dated July 24, 1969. After the death of Fatehlal, the account books ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng so, the AAC relied on a decision of the Punjab and Haryana High Court in Dharm Pal Sat Dev v.ClT[1974]97 ITR 302 (P H). Dissatisfied, the assessee-firm appealed to the Tribunal. Before the Tribunal, on behalf of the assessee, Addl. CIT v. Harjivandas Hathibhai [1977] 108 ITR 517 (Guj) and Dahi Laxmi Dal Factory v. ITO [1976] 103 ITR 517 (All) [FB] were cited. The Department relied on CIT v. Kelukutty [1972] 85 ITR 102 (Ker) and CIT v. Veeraraghavulu Chetty Sons Co. [1975] 100 ITR 723 (AP). The Tribunal upheld the view taken by the ITO as well as by the AAC. An application under s. 256(1) of the Act was moved before the Tribunal and that has led to this reference. We have heard Mr. D. S. Shishodia, learned counsel for the assessee-f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... succeeding his death. On these facts, the question before the taxing authorities was whether the firm which was constituted by means of the partnership deed dated October 22, 1968, stood dissolved and a new partnership had come into existence or despite the fact that a new firm was constituted by the partnership deed dated July 24, 1969, which was made operative from July 15, 1969, there was merely a change in the constitution of the firm within the meaning of s. 187(2) of the Act. Section 42 of the Partnership Act deals with dissolution on the happening of certain contingencies. The relevant part of s. 42 of the Partnership Act is as follows: " Section 42. Dissolution on the happening of certain contingencies subject to the contract b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue, reliance was placed on Nandlal Sohanlal's case [1977] 110 ITR 170 (P H) [FB], wherein it was held by a majority relying on the Supreme Court's judgments in Abraham v. ITO [1961] 41 ITR 425 (SC) and CIT v. Angidi Chettiar [1962] 44 ITR 739 (SC) as under (p. 92 of 148 ITR): " ... that where a special provision was made in a taxing statute in derogation of the provisions of the Partnership Act, effect should be given to it and where no such provision had been made, liability for payment of tax could be determined by taking into consideration the general provisions of the Partnership Act. Therefore, where the provisions of the I.T. Act are clear, resort cannot be had to the provisions of another statute like the Partnership Act. Theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undry and Machines (Knives) case [1977] 109 ITR 92 (P H), Visakha Flour Mills' case [1977] 108 ITR 466 (AP) [FB] and Nandlal Sohanlal v. CIT [1977] 110 ITR 170 (P H) [FB]. In CIT v. Satya Deo Omprakash [1982] 136 ITR 720 (All), it was held that where a firm is dissolved either by agreement of partners or by operation of law on the death of a partner and another firm takes over the business, s. 187(2) will not come into operation and two separate assessments will have to be made. The same view has been taken by the Madhya Pradesh High Court in Ganesh Dal Mills' case [1982] 136 ITR 762 (MP) in which they have dissented from the view of the Punjab High Court in Nandlal Sohanlal's case [1977] 110 ITR 170 (P H) [FB] and relied on the dec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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