1997 (7) TMI 51

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....ion for the opinion of this court: "Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in holding that two separate assessments in respect of two periods should be made in the hands of newly constituted firm?" The facts are that the assessee-firm was constituted under a partnership deed dated May 8, 1967, by two partners, namely, Bhagwan Dass and Cha....

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....efore, two assessments for the two broken periods should have been made. The contention of the assessee-firm was rejected by the Assessing Officer who was of the view that there was only a change in the constitution of the firm, inasmuch as the two original partners, namely, Bhagwan Dass and Chandu Lal, continued to be the partners under the new partnership deed. The Assessing Officer was of the v....

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....me derived by the old firm. But this section even by implication does not create a fiction that the income derived by the old firm becomes the income of the reconstituted firm. The income of the old firm cannot be clubbed with the income of the reconstituted firm. After reconstitution, the firm becomes a distinct assessable entity, different from the firm before its reconstitution. Therefore, two ....

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.... 355 (SC), in which the court clearly observed that "change in the constitution of the firm" is defined in section 187. The relevant part of the definition states that if one or more of the partners cease to be partners in such circumstances that one or more of the persons, who are partners of the firm before the change, continue as partner or partners after the change, there is a change in the co....