Change in partnership constitution does not break business identity, preserving section 25(4) relief on succession.

A mere change in the partners or their profit shares does not amount to a succession where the same business unit continues unchanged. Under section 25(4), a firm remains a distinct assessable unit, so the real question is whether there was cesser of the old business and commencement of a new one. On the stated facts, the tea-broking business continued without dissolution, division of assets and liabilities, or transfer to an outside person. The change was only in partnership constitution, so the statutory relief remained available when the business was succeeded by a private limited company.

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Issues: Whether a firm was entitled to relief under section 25(4) when, though its partners changed over time, the business continued unchanged and was ultimately succeeded by a private limited company.

Analysis: Section 25(4) excludes a mere change in the constitution of a partnership from the concept of succession. The law of income-tax treats a firm as a distinct assessable unit, and the real inquiry is whether the same business unit continued or whether there was a cesser and a new succession. On the facts, the business carried on as tea brokers remained the same throughout, with no dissolution, division of assets and liabilities, or transfer to an outside person. The change was only in the personnel of the partners and their shares, which did not destroy the identity of the unit.

Conclusion: The firm was entitled to relief under section 25(4), and the answer in the assessee's favour was .

Final Conclusion: Mere changes in partners did not prevent the continued business from being treated as the same assessable unit for income-tax purposes, so the statutory relief remained available upon succession to the company.

Ratio Decidendi: For the purpose of section 25(4) of the Indian Income-tax Act, a mere change in the constitution of a partnership does not amount to a succession if the same business unit continues without cesser of the business.

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