TaxTMI 
TaxTMI 
1982 (3) TMI 193
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....clause assessment in the said deed as to whether in the event of death the firm was to be dissolved or not. Shri. Ghervarchand died on 15th June,1970 and his wife Smt. Subattibai was taken as a partner and it was deemed that the firm was started on 16th June, 1970. The name and the business of the firm continued to be the same. Even in this partnership deed there is no clause specifically mentioned in as to what will happen on the death of a partner in that whether it will be continued or dissolved. However, there were separate books of accounts for the second period. 3. The assessee filed two returns of income, one for the period upto 16th June, 1970 declaring total income at Rs. 88,730 and the other for the period from the 16th June, 1....
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....prepared. The assessee's representative relied on a number of decisions of High Courts. ITO who was present, justified the assessment order of his predecessor. After hearing rival submission, the AAC came to view that there was no clause contrary to s.42(c) and automatically s. 42(c) of the partnership Act would be applicable and therefore, on the death of Ghevarchand the earlier partnership firm came to an end and the new partnership was started w.e.f. 16th Jun, 1970. Since separate profit and loss accounts were mentioned and separate books of accounts were also maintained which showed that there was a different firm from the earlier one. The AAC further held that the assessments required to be made for two periods, viz., one prior t....
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....ere squarely dealt with by the High Court. It was stated though there was no express condition as to what will happen on the death of a partner, it is clear that the provisions of Indian partnership Act would be applicable and therefore, s. 42(c) comes into play. However it was desire of the remaining partners who had to take a decision and they took the widow of Ghevarchand as their partner and business was started. The conduct of the partners goes to show that earlier firm was dissolved and a new firm sprung up. Reference was a made to (1974) 97 ITR 302 (P&H) and it was stated on facts that the case is distinguishable. 7. We have heard the rival submissions and gone through the orders of the authorities below and also the partnership d....
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....y of them. It was further held that the provisions of s. 187(2) were not applicable and that a single assessment could not be made for the whole year. It may further be stated that it was held by High Court if by operation of law partnership is dissolved and thereby ceases to exist, there could be no question of change in its constitution. The High Court's followed the Allahabad High Court decisions reported at 103 ITR 517 (All), 108 ITR 517 (All) 109 ITR 154 (All) (FB) and 110 ITR 468 (AP) (FB) and they dissented from 97 ITR 302 (Punj) and 108 ITR 466 (AP)(FB) and 110 ITR 170. 8. Having regard to the facts and circumstances and in particular that two separate accounts were made and considering the deeds we are of the view that this is a....