TaxTMI 
TaxTMI 
1993 (7) TMI 125
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....firm was constituted under a deed of partnership dated 1-4-1976. It consisted of six partners, namely, S/Shri Dharam Dev Saggar, Sat Dev Saggar, Ramesh Kumar Saggar, Prem Kumar Saggar, Suresh Kumar Saggar and Anil Kumar Saggar. The partnership was to be "at will" and there was no provision of continuation of the firm in the case of death of any partner. On 10-9-1983, Shri Suresh Kumar Saggar died. Thereafter, w.e.f. 12-9-1983, a fresh partnership deed was drawn. In addition to the five partners, who were there before the death of Shri Suresh Kumar Saggar, two more partners, namely, Smt. Neelam Saggar and Master Raghav Saggar, were brought in as partners. The assessee filed two separate returns - one for the period from 1-4-1983 to 10-9-1983....
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....e partnership deed of 1-4-1976 according to which the death of the partner would not dissolve the firm. The ld. counsel was fair enough to submit that the decision of the jurisdictional High Court of Punjab and Haryana in Nandlal Sohanlal v. CIT [1977] 110 ITR 170 (FB) was against the assessee. It was, however, submitted that the said decision was rendered on 24-5-1977 and that thereafter a lot of case law had developed and the Supreme Court had also decided the issue in Wazid Ali Abid Ali v. CIT [1988] 169 ITR 761 with the result that the law laid down by the Punjab and Haryana High Court was no longer good law. It was also pointed out that the Taxation Laws (Amendment) Act, 1984, with retrospective effect from 1-4-1975, had inserted a pro....
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.... firm. A large number of authorities were cited before the Supreme Court in that case. It, however, appears that the Punjab and Haryana High Court decision in Nandlal Sohanlal's case was not cited. The Supreme Court considered the Full Bench decision of the Madhya Pradesh High Court in Girdharilal Nannelal v. CIT [1984] 147 ITR 529. That decision had in terms followed the aforesaid decision of the Punjab and Haryana High Court in Nandlal Sohanlal's case. The Madhya Pradesh High Court had held that any matter for which a provision is made in the Income-tax Act, 1961, is to be governed by it, notwithstanding anything different or to the contrary contained in the general law relating to that matter. In other words, the view of the Madhya Prade....
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....ccepted the claim of the assessee in this regard. 9. When the matter came before the Allahabad High Court, it was considered necessary to find out as to what was contained in the partnership deed and whether there was a clause relating to the continuance of the firm even in the event of death of any partner. Since there was no finding of fact by the Tribunal. In this regard, the matter was remanded to it. This case, in fact, supports the case of the assessee. In the case of the assessee, the partnership deed does not contain a clause relating to the continuance of the firm even in the event of death of any partner. In such a situation. the firm shall stand dissolved on the death of Shri Suresh Kumar Saggar on 10-9-1983. 10. It may als....
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....o to provide that nothing contained in clause (a) of section 187(2) shall apply to a case where the firm is dissolved on the death of any of its partners. According to the Circular, the effect of this amendment will be that where a firm is dissolved on the death of any of its partners, it shall not be regarded as a case of change in the constitution of the firm under the special provisions contained in section 187(2)(a) of the Income-tax Act. 13. We do not agree with the submission of the learned counsel for the assessee that in every case, where one of the partners dies, the firm is and must be held to be dissolved for the purposes of the Act. According to us, the language of the proviso is clear and it says that nothing contained in cl....