1983 (6) TMI 10

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..... dated April 1, 1969. The above firm was granted registration under the I.T. Act, 1961, in respect of its income-tax assessments from the assessment year 1963-64 up to and inclusive of the assessment year 1972-73. During the previous year ended with March 31, 1973, relevant to the assessment year 1973-74, one of the partners, Shri Arjundas Bulchand, died on November 19, 1972. The ITO by order dated March 11, 1974, granted registration to the assessee-firm for the assessment year 1973-74 under s. 185(1)(a) of the I.T. Act, 1961, observing as follows : " There has been a change in the constitution of the firm during the year. Although partner, Shri Arjundas Bulchand, passed away on November 19, 1972, as provided in one of the clauses of the .....

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..... partnership will devolve on the surviving partners. As a result of the specific clauses in the partnership deed, the firm does not stand dissolved by reason of the death of the partner as the clause specifically provided that the firm shall not be dissolved on the death, retirement or bankruptcy of a partner and that the remaining partners shall continue and carry on the business. The Tribunal also found that the share of the deceased partner would stand reallocated as per the terms of the partnership deed among the surviving five partners and, therefore, the partnership should be taken to specify the profit sharing ratio of each one of the remaining partners. In this view, the Tribunal held that the assessee-firm is entitled to registratio .....

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..... be taken equally by the remaining partners. Only if varying shares are intended to be given to the remaining partners, then such varying shares are to be specified either in the original partnership deed or in a fresh partnership deed. It is well established that if from the terms of the partnership deed the shares of the partners could be clearly determined, the firm is entitled to registration. In this case, since the share of the deceased has to be taken by the remaining partners, it should be taken that under the partnership deed, the remaining partners will be entitled to share equally the interest of the deceased partner. Therefore, on the facts and in the circumstances of this case, no reconstitution of the firm is necessary so as t .....

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