1995 (11) TMI 77

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....n existence during the previous year relevant for the assessment year 1976-77 ? " The facts, as briefly stated, are that the assessment year involved is 1976-77. The assessee, a dealer on wholesale basis in cloth, filed two returns of its income one for the period April 1, 1975, to August 14, 1975, and the other for the period from August 18, 1975, to March 31, 1976. The case of the assessee was that one of its partners, Sri Sobh Raj, died on August 14, 1975, and, therefore, the firm stood dissolved and an absolutely new firm came into existence on August 18, 1975. The assessee, therefore, contended that two assessments for two different periods on separate firms be made for the year 1975-76. The Income-tax Officer held that the firm ....

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.... as against the date of August 14, 1975, when the earlier firm was dissolved. The death of a partner art the one hand had the effect of dissolving the firm, while the continuity for the whole of the period a 12 months is absent and is found lacking as from the reading of the assessment order . . . . The cumulative effect of all these, is that, applying respectfully, the ratio of the decision of the Full Bench of the Allahabad High Court in the case of Badri Narain Kashi Prasad v. Addl. CIT [1978] 115 ITR 858, there can be no other inference, but, that there were two different firms in existence for the two different periods and, accordingly, on the facts and in the circumstances of the present case, in appeal before us, we are of the opinio....