1992 (9) TMI 28

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....e assessment year 1976-77, one for the period from April 1, 1975, to September 30, 1975, and the other for the period October 1, 1975, to March 31, 1976, and not the assessment as made by the Income-tax Officer ?" The brief facts are that in the previous year relevant to the assessment year 1976-77, to which the dispute pertains, up to September 30, 1975, the assessee-firm was comprised of four partners which included two minors admitted to the benefits of partnership. With effect from September 30, 1975, the minors admitted to the benefits of partnership retired from the firm. The remaining two partners alone with one Smt. Parmeshwari Devi executed a new deed of partnership with effect from October 1, 1975. The assessee claimed that two....

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....ing the assessment. The expression "change in constitution" for the purposes of section 187 is defined in sub-section (2) by its clauses (a) and (b). On a plain reading of clause (a) of sub-section (2) of section 187, it would be evident that when one or more of the partners retire(s) and the business is continued by the remaining partners with or without new partner(s), the case falls within the mischief of section 187(2) of the Act. At this juncture, we may notice that in the case of Shiv Shanker Lal [1977] 106 ITR 342 (All), the view expressed by this court was that in case where the firm is reconstituted, the old firm ceases to exist. Section 187 does not contemplate that the income derived by the old firm becomes the income of the r....