1990 (12) TMI 60

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.... REDDY C. J. -Under section 256 (2) of the Income-tax Act, 1961, the Appellate Tribunal has stated the following two questions for the opinion of this court : " 1. Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in holding that two assessments should be made separately for the two periods, April 1, 1971, to October 31, 1971, and November 1, 1971, to ....

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....1971, and the other from November 1, 1971, to March 31, 1972. Separate applications for registration/continuation were filed. The Income-tax Officer was of the opinion that it was a case of mere reconstitution of firm and, accordingly, made one assessment for the entire year. He also did not accept the return relating to the income, he enhanced it. On appeal, a contention was raised by the asse....

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.... November 1, 1971. On that day, as stated above, three of the four partners retired leaving only one person in the firm. On the same day, the said sole surviving partner took two other persons as partners. The question is whether it is a case of reconstitution within the meaning of section 187 of the Income-tax Act or a case of succession within the meaning of section 188. If the Partnership Act a....

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....death of any of its partners." According to the above sub-section, where one or more of the partners cease to be partners or one or more new partners are admitted, in such circumstances that one or more of the persons who were partners of the firm before the change continue as partner or partners after the change, it shall be treated as reconstitution. In similar circumstances, we have held tha....