Change in firm constitution governs assessment on the reconstituted firm when partners continue or profit-sharing shares change.

Section 327 governs assessment after a change in the constitution of a firm, requiring assessment on the firm as constituted at the time of assessment. Change arises on retirement, cessation, or admission of partners if at least one pre-change partner continues, or where continuing partners alter their profit-sharing shares. Where all former partners cease and a different group carries on the business, succession or other relevant provisions require consideration. Dissolution on the death of a partner is excluded from the specified rule.

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