2000 (1) TMI 5

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.... So far as the facts are concerned, it transpires that the partnership firm, "M/s. Delhi Haryana Dall Mills", was constituted by a partnership deed dated April 18, 1970, executed by seven partners. The said partnership was dissolved by a deed of dissolution executed on May 20, 1977, according to which the partners-(1) Sh. Johri Mal; and (2) Sh. Shiv Lal-took over the running business, the factory building, machinery, furniture, etc. The other partners were to be paid off. On May 21, 1977, Sh. Johri Mal and Sh. Shiv Lal entered into a new partnership deed taking in three new partners. The income-tax returns were filed for the aforesaid two periods, namely, one return for the period from April 1, 1977, to May 20, 1977, and the second retur....

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.... decision in the case of CIT v. Har Nath Ram Nath [1997] 224 ITR 713 (All) and in the case of CIT v. Ramesh Biscuit Factory [1994] 205 ITR 205 (All), that it was not correct on the part of the Tribunal to arrive at a conclusion that there was a dissolution, but it ought to have held that there was reconstitution of the firm and/or continuation of the firm. It was contended, relying on these judgments, that although a new partnership deed was executed in each of the cases, yet it was held that it was a case of reconstitution. Reverting to the decisions, we find that there was no question of dissolution of the partnership firm. A minor who was admitted to the partnership firm, on his attaining the age of majority, decided to continue as a par....

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....r hand, there was dissolution of a firm and a new firm came into existence after the dissolution. Therefore, section 187(2) will have no application. Learned counsel for the Revenue submitted that the Tribunal relied on two judgments of this court. Learned counsel further submitted that against the decision of the High Court, the matter was carried in appeal by the Revenue and the appeal has been admitted for hearing by the Supreme Court. It may be noted that we are not deciding the issue on the basis of the judgments on which reliance was placed by the Tribunal but upon a consideration of the facts in the context of legal principles on the question as to whether section 187(2) would be applicable or not. Therefore, it makes no differenc....