2001 (11) TMI 11

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....erpretation of section 42 of the Indian Partnership Act read with section 187(2) of the Income-tax Act, 1961, the learned Tribunal was right in law in holding that it is a case of dissolution and not of change in constitution? 3. Whether the learned Tribunal was right in law in holding that the Revenue was justified in rejecting the claim of the assessee for adopting the same value for the second period as had been adopted in valuing the closing stock for the first period?" Briefly stated, the facts of the case are that a firm was constituted of four partners, namely, Shri Pyarelal, Shri Nathmal, Smt. Rani Devi and Shri Tarsemlal, with effect from March 27,1969, on the terms and conditions of the partnership deed executed on June 15, ....

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.... explain the basis for adopting the value of closing stock for the first period, which has been shown as opening stock in the second period. After receipt of the said letter, the assessee filed a consolidated return which was termed as a revised return. The assessee claimed that only one assessment should be made in respect of the entire period as there has been no dissolution of the partnership firm on the death of one of the partners but only a change in the constitution of the firm. By letter dated June 28, 1990, the assessee claimed that after the execution of the first partnership deed, a supplementary partnership deed had been executed by the firm on July 24, 1969, which contained clause 10 to the effect that the firm would not be dis....

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....tution of the firm. It is, thus, submitted that the question relates to the interpretation of law contained in section 42 of the Indian Partnership Act, 1932, read with section 187(2) of the Income-tax Act. Learned counsel has also relied upon the decision of this court in CIT v. B.D. Dal and Oil Industries [1989] 175 ITR 372 wherein it is held that section 42(c) of the Indian Partnership Act envisages that a partnership would not stand dissolved on the death of a partner but shall continue with the remaining partners together with the heir of the deceased partner, there results only a change in the constitution of the firm and a single assessment is to be made on the firm for the periods before and after the death of a partner. On a car....