TaxTMI 
TaxTMI 
1972 (9) TMI 37
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....partners of whom the petitioner was one. The firm carried on business in manufacture of beedis and sale of beedi leaves and beedi tobacco. On September 27, 1960, the petitioner retired from the firm, but the other partners continued to carry on the business under the same name and style. On October 4, 1960, the petitioner also executed a deed in favour of the continuing partners relinquishing his right, title and interest in the business for a consideration of Rs. 30,000. On July 12, 1961, the continuing partners of the firm executed a deed of indemnity indemnifying the petitioner. It is not necessary at this stage to note the relevant portions of the deed of relinquishment and the deed of indemnity, as they would be considered when dealing....
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....cember 30, 1968. It is these orders made under section 155 that have been challenged in these writ petitions. It was first contended by the learned counsel for the petitioner that the assessment of the petitioner could not be amended or revised under section 155 on the basis of the reassessment of the firm made under section 147 as the initiation of the proceeding under section 147 and the consequent orders passed thereon were subsequent to his retirement from the partnership firm. Under section 155(1) of the Income-tax Act, 1961, corresponding to section 35(5) of the old Act, where in respect of any completed assessment of a partner in a firm, it is found on assessment or reassessment of the firm that the share of a partner in the incom....
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....ce. Section 2(8) defines " assessment " as including " reassessment ". The reassessment proceedings also could, therefore, be initiated in respect of a firm in which there has been a change in the constitution of a firm or where the firm is dissolved or discontinued at the time when the proceedings were initiated. We do not find anything in the context of these provisions requiring not to give effect to the definition of " assessment ". On a plain reading of section 187, therefore, the reassessment could be made on the reconstituted firm and if the firm's reassessment relates to an accounting period in which the petitioner had continued as a partner of the partnership firm, his assessment could be corrected or amended in respect of that ass....
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....ge of majority by the time the assessment was completed on 2nd February, 1939, though the share income related to a period when he was a minor, that income should not be included in the assessee's income under section 16(3). The same argument was advanced in respect of the assessment year 1939-40 also. It was held that since for the purpose of computing the total income of the assessee, the relevant period is the previous year and since during the previous year Ashokbhai was a minor, the profits coming to the share of Ashokbhai had to be included in the assessment of the assessee. It is relevant to note that when the minor becomes a major, a change in the constitution of the firm occurs and it is because of that change in the firm the argum....
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....nant with the outgoing partner to pay, discharge and fulfil all debts and obligations of the partnership and at all times hereafter effectually indemnify and keep indemnified the outgoing partner and his representative-in-interest and his estate and effects thereof from all proceedings, claims and expenses in respect thereof. " In the deed of indemnity it is provided that the continuing partners jointly and severally : " hereby undertake to indemnify (the petitioner) ......... against all claims that may arise after the date of the dissolution for the period before the date of dissolution and that may be raised thereafter by the income-tax department either in relation to the income-tax assessment of the said firm or in any such asses....