9911796707
TMI Blog1986 (3) TMI 100X X X X Extracts X X X X X X X X Extracts X X X X ..... hs, i.e., 1-10-1978 to 31-3-1980. 2. The relevant facts may be briefly stated. There was a firm of seven partners constituted under a partnership deed dated 3-11-1973. As per the information given by the assessee's counsel, Shri Benarsi Dass, the firm followed the accounting year commencing on 1st October and ending on 30th September. In the course of accounting year commencing on 1-10-1978 one of the seven partners Shri Romesh Kumar Sekhri on account of certain disputes and differences retired from the firm on 31-3-1979 and a deed of dissolution dated 24-4-1979 was drawn up. A new firm was constituted under a deed dated 15-5-1979 consisting of six partners of the predecessor firm and taking in a new partner Mrs. Janak Rani Sekhri. This f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prejudicial to the interests of revenue. He also stated that change can be permitted only upon such conditions as the ITO may think fit to impose and one of the conditions generally imposed is that interest of the revenue is fully safeguarded and this could happen only if the income of both the returns was clubbed and only one assessment for both the accounting periods is made under one single assessment order, since both the account periods fall for assessment in the assessment year 1980-81. The assessee went in appeal to the AAC. The assessee's counsel contested the view of the ITO about the change in the previous year by pointing out that when there was a dissolution of the old firm the new partners can at their own convenience change t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt authorities. He also relied on the reasoning about the change in the accounting year taken by the ITO in the assessment order. Shri Benarsi Dass appeared for the assessee reiterated the two contentions raised before the AAC. 4. On a careful consideration of the facts and in the circumstances involved and the submissions made by the two sides, it becomes apparent that there is a confusion about the issue arising for consideration. In cases of change in the constitution of firm what is important is to frame an assessment as provided in section 187(1) and for that purpose sub-section (2) gives a definition of change in the constitution. In the instant case, in our opinion, the real controversy is not about the change in the constitution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [1977] 110 ITR 170 (FB) it can no longer be disputed that a change in constitution is involved. But the question that still remains to be answered is whether an assessment under section 187(1) can be made on the assessee on the facts and in the circumstances of the case and are all the conditions to be satisfied there for making a single assessment ? It will be pertinent to note that section 187(1) is based on the concept of continuing of same business of the predecessor firm but along with it is coupled the condition that income of the previous year shall be computed. The previous year obviously will be the previous year followed by the predecessor firm. If the single assessment is to be made the previous year to be followed by the success ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
