TaxTMI 
TaxTMI 
1983 (11) TMI 34
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.... be assessed in the hands of the assessee-firm and the income from November 8, 1973, to March 31, 1974, in the hands of the successor-firm ? The assessee in this case for the assessment year 1974-75 filed a return of income on September 7, 1974, for the accounting period April 1, 1973, to November 7, 1973, showing an income of Rs. 14,811 and the said return was filed in the status of a registered firm consisting of four partners, viz., Meenakshi Achi, Ramayee Achi, Rajeswari Achi and Sundari Achi. The first two partners had a 3/10ths share each and the last two had a 2/10ths share each. According to this return, the said firm, which was constituted under an instrument of partnership dated November 12, 1970, had been dissolved with effect f....
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....s out of time. Under the circumstances, the registration asked for by the firm is hereby cancelled and the status of the firm is taken as that of an unregistered firm ." Simultaneously with the passing of the order under s. 185(1)(b) of the Act, the ITO made on March 14, 1975, a single assessment in the status of an unregistered firm on a total income of Rs. 18,400 for the period April 1, 1973, to March 31, 1974. The assessment order, however, does not state any reason why one single assessment was made. Subsequently, it would appear, another ITO made another assessment in respect of income of the firm from November 8, 1973, to March 31, 1974, on February 8, 1977, on an income of Rs. 4,250. He also granted registration under s. 185 of the ....
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.... the Andhra Pradesh High Court in Addl. CIT v. Visakha Flour Mills [1977] 108 ITR 466. Before the Tribunal, the assessee, on the other hand, contended that, since the firm of four partners had been dissolved and a new firm of five partners had been constituted after such dissolution, the assessment should be separately made, one on the dissolved firm and the other on the new firm of five partners, that when there is a dissolution of the firm of four partners, it should be taken to be that the old firm had been succeeded to by the new firm and that, therefore, s. 188 will stand attracted. In support of the said submission, the assessee relied on the Full Bench decision of the Andhra Pradesh High Court in Addl. CIT v. Vinayaka Cinema [1977] 1....
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.... before the constitution of the firm of five partners. Though the learned counsel for the Revenue questioned that finding, we are inclined to agree with the view taken by the Tribunal that there was dissolution of the firm of four partners and that it is only after that dissolution, the firm of five partners was constituted. It is no doubt true that there is no deed of dissolution as such. Bat the factum of dissolution has been referred to in the return filed for the dissolved firm, and there is a reference to the factum of dissolution even in the partnership deed constituted by the five partners dated November 8, 1973. Based on the factum of dissolution in the subsequent partnership deed, the AAC as well as the Appellate Tribunal have proc....
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....Kaithari Lungi Stores v. CIT [1976] 104 ITR 160, in Mavukkarai (N.) Estate Tea Factory v. Addl. CIT [1978] 112 ITR 715, and the recent unreported decision in CIT v. Sithan Chetty Sons [T.C. No. 16 of 1978, judgment dated June 13, 1983-since reported in [1984] 145 ITR 306(Mad)]. The same view has been taken by the Full Bench of the Andhra Pradesh High Court in Addl. CIT v. Vinayaka Cinema [1977] 110 ITR 468 and Division Bench of the Calcutta High Court in Mathurdas Govardhandas v. CIT [1980] 125 ITR 470 and a decision of the Allahabad High Court in Dahi Laxmi Dhal Factory v. ITO [1976] 103 ITR 517 (All) [FB]. In these decisions, it has been pointed out that if there is factually dissolution of a firm and reconstitution of a new firm after s....