9911796707
TMI Blog1978 (9) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... on 7th July, 1959. The firm continued the business. It took the legal representatives of the deceased partner as partners of the firm. The firm applied for renewal of registration for the assessment year 1960-61 on 29th June, 1960. The ITO refused renewal. He held that on the death of a partner a change occurred in the constitution of the firm. No fresh deed of partnership having been executed the firm was not entitled to renewal of registration. On appeal this view was reversed, but was again upheld by the Tribunal. At the instance of the assessee, the Tribunal has referred for our opinion the following questions of law : " 1. Whether, on the facts and in the circumstances of the case, the assessee-firm was entitled to renewal of reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Bench decision of this court in CIT v. Shiv Shanker Lal Ram Nath [1977] 106 ITR 342. It held that, on reconstitution, the firm becomes a distinct assessable entity, different from the firm before its reconstitution. Therefore, two different assessment orders had to be passed against the reconstituted firm-one in respect of the income derived by it before reconstitution, and the other in respect of the income derived after reconstitution. The income derived by the old firm does not become the income of the reconstituted firm. It cannot be clubbed with the income of the reconstituted firm. The position is that when a partner dies but the firm is not dissolved and the business is carried on, the constitution of the firm changes. different ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. This is so, because the erstwhile firm is deemed to have died. In CIT v. Kejriwal Traders [1969] 71 ITR 463 (Cal), K. L. Roy J., observed (p. 479) : "If the authorities below had granted registration to the firm as constituted under the instrument dated the 18th April, 1957, for the period 1st February to 30th September, 1957, there could not possibly be any objection. Bat in granting registration to the reconstituted firm for only a part of the accounting year, the Tribunal, in my opinion, has erred." In that case reconstitution took place on 30th September, 1957. This, therefore, supports the view that the original instrument of partnership could be granted renewal of registration for the purpose of assessment of the erstwhile ..... X X X X Extracts X X X X X X X X Extracts X X X X
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