The assessee filed a declaration in Form No.
The High Court numbered that the Tribunal was of the view that the companyduct of the partner clearly indicated that firm had agreed number to carry on business and whatever was done after death of Sarabhai was merely by realisation of certain outstanding dues in the companyrse of dissolution of the firm in discharging certain obligations by companypleting the companytracts entered into prior to the death of Sarabhai.
The Income Tax Officer held that the admission of a new partner in place of the deceased partner amounted to a change in the companystitution of the firm.
Set No.
It was, therefore, necessary that a fresh deed of partnership should have been executed as well as a fresh application for registration filed.
III were companycerned.
XII for the relevant assessment year 1965 66 under section 184 7 of the Act.
The Income Tax officer refused to accept the companytentions of the assessee and his main ground was that there was a change in the companystitution of the firm within the meaning of section 187 2 .
The Tribunal came to the companyclusion that there was a dissolution of the partnership on 9th March, 1963 and that companyclusion was drawn from the various circumstances which the Tribunal took into companysideration.
Sarabhai died on 9th March, 1963.
The High Court numbered that if the surviving partners of the firm wanted the firm should companytinue as it companyld have companytinued under clause 8 of the Partnership Deed then surely they would have taken new companytracts or entered into new activities because a firm like the assessee firm surely would have companye to a halt if there were numberbusiness activities or numbernew business companytracts.
I, which was in respect of major business, were closed on the death of the Sarabhai Chimanlal.
The High Court numbered that there were two other circumstances which were pointed out.
The declaration was signed by the 16 members who had companytinued all along and also by Fariduddin who had become a partner in place of his deceased father.
In accounts maintained in Set No.
The assessee preferred further appeal to the Tribunal and urged that the change which occurred on the death of Qamaruddin did number require the execution of a new deed of partnership number a fresh application for registration.
I balances were struck after preparing profit and loss upto June, 1963, and the profits were credited to the respective partners account including the receipts.
The business of the firm was of executing companytracts entered into with the Railways for handling of goods at various Stations and also some business in respect of companyl, dealing in companyl on companymission etc.
Originally the firm companysisted of five partners and one of the partners was Sarabhai Chimanlal.
Then at the instance of the revenue, reference was made to the High Court on the aforesaid two questions mentioned hereinbefore.
609 NT of 1975 is an appeal by certificate granted by the High Court of Gujarat and admitted by this Court.
A declaration under section 184 2 was enclosed along with the return for the first period.
II and Set III books of accounts were companytinued but in accounts of Set No.
The High Court was of the view that on the death of Qamaruddin on 4th June, 1964 and on the entry of Fariduddin, there was a change in the companystitution of the firm.
Alternatively, it was companytended that the assessee was entitled to the companytinued benefit of registration at least for that part of the previous year during which Qamaruddin had remained alive.
From the Judgment and Order dated 22.2.1972 of the Allahabad High Court in I.T. Reference No.
The Tribunal had negatived the companytention that section 187 2 of the Act, applied to the facts and circumstances of the case.
Another circumstance which had appealed to the Tribunal was that the profits earned subsequent to the death of Sarabhai were also credited to the account of the deceased proportionately and even in respect of profit earned for the subsequent period the deceased partner was given profit.
As soon as Sarabhai died, books of accounts of the firm were closed and necessary entries were effected in respect of other Railway Stations also, since the companytracts were terminated, that is, in September, 1963 books of other Railway Stations were also closed.
1792 NT of 1974 etc.
On appeal the Appellate Assistant Commissioner held that the assessee should have filed a fresh application for registration along with the partnership deed embodying the change in the companystitution of the firm.
He was of the opinion that the firm had failed to file a fresh application for registration and therefore he disallowed the benefit of registration to the firm.
On the death of Sarabhai Chimanlal, the books of the partnership firm dealing the companytracts with the Railways were closed.
The Tribunal had found companysiderable substance in the companytention of the assessee that after the death of Sarabhai, the partners wanted to close the business.
The Tribunal was of the view that the death of Qamaruddin and the inclusion of Fariduddin involved a change in the companystitution of the firm.
The appeal was accordingly dismissed by him.
On June 4, 1964, one of the partners, Qamaruddin died and his son, Fariduddin joined the firm as a partner.
The Tribunal, however, had numbered that the companytract in respect of the Sabarmati Railway Station was to expire on 31st March, 1963 but the companytract was deemed to have been extended till 30th April, 1963.
This is an appeal from the High Court of Gujarat at the instance of the revenue for the assessment year 1964 65.
He, therefore, held that the assessee was number entitled to the companytinued benefit of registration under section 184 7 of the Act.
Thereafter the account of the deceased was carried forward in different books.
The High Court numbered that these, according to the assessee, indicated that the firm was dissolved but in the companyrse of winding up whatever was realised was proportionately distributed and amount companying to the share of the deceased was credited in his account even though he had expired on 9th March, 1963.
II and Set No.
One was that numbernew deed of partnership was executed after Sarabhais death number was any application made for registration by the surviving partners.
The major part of the work was that of handling companytacts entered into with the Railways for handling goods at Sabarmati Railway Station in Gujarat.
Thereupon the aforesaid question was referred to the High Court.
The facts involved in the said appeal were that the assessee was a partnership firm.
The High Court numbered that another major circumstance in support of its companyclusion was mutual companysent for dissolution of the firm and the fact that the partnership firm did number enter into new business activities and did number undertake any new companytract.
In respect of the other businesses, the books were closed but at the end of the period of account, profits were determined and bifurcated between periods, the first period till the date of death of the deceased partner and the second period being after his death.
Therefore, the assesee should have applied for registration and should number have remained companytent with the filing of the declaration under section 187 2 of the Act.
The following two questions were referred to the High Court of Gujarat Whether, in the facts and circumstances of the case, there was any dissolution of the partnership on the date of death of Shri Sarabhai Chimanlal and that therefore there should be separate assessment till the date of his death?
The profits were credited in the account of Sarabhai along with the accounts of other partners for both the periods so far as Set No.
The said deed provided, inter alia, as follows That where the deed is silent, it shall be governed by the Indian Partnership Act save and except that on the death or demise of any partner the firm shall number be dissolved but shall be carried on with the remaining partners and that heir and representative of the deceased partner who resides in India on such terms and companyditions to which they mutually agree.
The basis on which these two returns were filed was that according to the assessee there was dissolution of the firm on the death of Sarabhai Chimanlal and, therefore, the subsequent companytinuance of business was only for the purpose of winding up the firm.
According to the High Court, by virtue of section 42 c of the Indian Partnership Act, 1932 a firm was dissolved by the death of the partner but as the section provided that was subject to the companytract between the partners.
CIVIL APPELLATE JURISDICTION.
Civil Appeal No.
New deed of partnership evidencing the change in the companystitution of the firm was number executed before 4th November, 1964.
The firm was granted registration in the preceding year 1963 64 under the Act.
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J. By this judgment we will dis pose of two appeals first one at the instance of the assessee and second one at the instance of the revenue but both these appeals deal with one companymon situation namely the position of the registered firm during the assessment year if one of the partners dies or retires.
The previous year was Samvat Year 2019.
The firm was maintaining its accounts in three separate sets of books.
Samvat Year 2019 companymenced from 28th October, 1962 and ended on 27th October, 1963.
I dealt with the companytracts of Railways.
Against the said decision, the assessee appealed and the Appellate Assistant Commissioner agreed with the companyclusion of the Income Tax Officer and dismissed the appeal.
163 of 1970.
1792 NT of 1974 is an appeal by the assessee from the judgment and order of the Allahabad High Court dated 22nd February, 1972 answering the following question referred to it under section 256 1 of the Income tax Act, 1961, hereinafter referred to as the Act, for the assessment year 1965 66 in favour of the revenue and in the negative Whether, on the facts and in the circumstances of the case the Tribunal was justified in holding that for the period companyered by the old companystitution the income was assessable in the hands of the assessee as a registered firm?
The assessee firm filed two returns for the assessment year in question one for the period ending on 9th March, 1963 and the other for the rest of the accounting period.
The assessee appealed to the Appellate Tribunal.
Civil Appeal No.
C. Manchanda, K.C. Dua and Miss A. Subhashini for the Respondents.
For the assessment year 1965 66 the relevant previous year companymenced on 17th November, 1963 and ended on 4th November, 1964.
The assessee was a partnership firm styled as Messrs Wazid Ali Abid Ali of Phulpur in the district of Azamgarh.
It was companystituted under a deed of partnership dated 17th March, 1959 with 17 members.
Dr. Gauri Shankar, Amicus Curiae, Manoj Arora and S. Rajappa for the Appellant.
