TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Join Channel
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: Whether, on the death of one of two partners in a firm, the firm stood dissolved so as to require separate assessments on the predecessor and successor firms, or whether the case was merely a change in constitution of the firm within the meaning of section 187 of the Income-tax Act, 1961.
Analysis: The original firm consisted of only two partners. On the death of one partner, only one surviving partner remained, and a firm cannot subsist with a single partner. On these facts, the earlier firm came to an end in law and the business was taken over by the newly constituted firm. The decision was consistent with the view that where two interpretations are possible, the interpretation favourable to the assessee should be adopted.
Conclusion: The case was one of succession under section 188 of the Income-tax Act, 1961, and not a mere change in the constitution of the firm under section 187. Separate assessments on the predecessor and successor firms were therefore justified.
Final Conclusion: The Revenue's challenge failed, and the order directing separate assessments was sustained.
Ratio Decidendi: Where a firm consisting of only two partners loses one partner by death, the firm is dissolved in law and the ensuing takeover by the new firm constitutes succession rather than a mere change in constitution.
TaxTMI 
