Closing stock revaluation on succession to a new firm was upheld where the predecessor partnership dissolved on a partner's death.

On the death of a partner, the old partnership was treated as dissolved and a new firm was constituted the next day, so the matter was one of succession rather than mere reconstitution. In that setting, the authorities were justified in valuing the predecessor firm's closing stock at market value for assessment purposes, and that approach was consistent with prior judicial authority followed by the Court. The reference was declined because no question of law arose from the Tribunal's order, and the addition based on revaluation of closing stock was upheld.

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Issues: Whether, on the death of a partner and formation of a new partnership, the closing stock of the predecessor firm could be revalued at market price while making the assessment for the relevant assessment year.

Analysis: The death of a partner dissolved the old partnership and a new firm was constituted the next day. The case was one of succession to a new firm and not a mere reconstitution. In such circumstances, the authorities were justified in valuing the closing stock of the predecessor firm at market value. The view adopted was consistent with prior judicial authority followed by the Court.

Conclusion: The reference was declined because no question of law arose from the Tribunal's order, and the addition based on revaluation of closing stock was upheld.

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