1993 (11) TMI 91

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..... pak Kumar Jain was admitted to the benefits of partnership being a minor. The constitution of the partnership firm as per the original partnership deed was as under:-- 1. L. Jai Parshad Jain 1/8 2. L. Jaini Lal Jain 1/8 3. L. Darshan Lal Jain 1/8 4. L. Trilok Chand Jain 3/32 5. L. Moti Lal Jain 3/32 6. L. Nem Chand Jain 1/16 7. L. Jinendra Kumar Jain 1/8 8. L. Vijender Kumar Jain 1/8 9. Deepak Kumar Jain 1/8 3. When Shri Deepak Kumar Jain attained majority, a fresh partnership deed was drawn up on 6-2-1976. The constitution of the partnership remained the same and there was no change in their shares either. 4. Shri Moti Lal Jain, one of the partners, died on 11-6-1980 which necessitated the drawing up of a fresh deed of partnersh .....

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..... Thus according to the specific clauses of both the partnership deeds, the retirement or death of the partners did not result in the dissolution of the firm and the legal representatives of the deceased partners were to be automatically treated as partners of the new firm. 7. The question to be decided, therefore, is whether on these facts the Assessing Officer was justified in making a composite assessment for the whole period by treating it as a case of change in the constitution of the firm or the first appellate authority was justified in ordering to make two assessments by taking it a case of dissolution of the firm. 8. The learned D.R. submitted that in the face of specific clauses in the partnership deeds that the death of a partner .....

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..... drawn up. There is a consolidated trading account prepared by the assessee. The Supreme Court in the case of Wazid Ali Abid Ali has observed at page 774 of the report that dissolution does not take place by death if there is a contract to the contrary and in such a situation, there is no dissolution of the firm but a mere change in its constitution. The Allahabad High Court in the case of Hanuman Prasad Dwarka Prasad has held that the death of a partner will not automatically mean the dissolution of the firm. According to the High Court, the partnership deed will have to be looked into to find out if there is a clause relating to the continuance of the firm even in the event of death of any partner. The conduct of the surviving partners wi .....

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