TaxTMI 
TaxTMI 
1984 (8) TMI 13
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....partnership dated January 8, 1969, five partners carried on textile business at No. 160, Chickpet, Bangalore. The firm was granted registration for the assessment years 1971-72 to 1973-74. This firm was following the year ending Diwali as the accounting year and the accounting year for the assessment year 1974-75 ended on October 26,1973, on Diwali day. On September 22, 1973, one of the partners left the firm. He was a lessee of the premises where the firm carried on business. The firm was evicted from that premises with effect from September 29, 1973. The firm was thus left with no business premises. It was inevitably dissolved with effect from September 30, 1973, with distribution of the assets and liabilities and closing of the books of ....
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....old firm was completely dissolved and the new firm had nothing to do with the old firm and the discrepancies in the new deed of partnership were due to clerical mistakes. The Tribunal agreed with those contentions and recorded its finding as follows: ". . . Factually, therefore, the firm of 1969 whose genuineness was never questioned by the Department was brought to a close on September 29, 1973, for reasons entirely outside the assessee's control. A legally valid dissolution deed has also been drawn up on this date. The firm in existence prior to this date had the previous year ending on 26th October, 1973. When the firm was dissolved on September 29, 1973, and the partnership came to an end, certainly the previous year also should have e....
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....ct the fortunes of the already dissolved firm of 1969, especially when there was no business carried on for three months in the interregnum. It also held that even if the new firm had filed an application in Form No.11A, it would not be proper or legally correct to impose its liability on the partners of the dissolved firm. The view taken by the Tribunal has been seriously challenged by Mr. Srinivasan, learned counsel for the Revenue. He relied upon the two decisions of this court: (1) in CIT v. Shambulal Nathalal & Co. [1984] 145 ITR 329 and (2) CIT v. Sree Durga Enterprises [1984] 145 ITR 351. The principle laid down in these two decisions is that if the dissolution of a firm is followed by constitution of a new firm with at least one co....