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Commissioner Of Income Tax vs Shree Agarwal Flour & Oil Mills

High Court Of Judicature at Allahabad|30 April, 1997

JUDGMENT / ORDER

JUDGMENT BY THE COURT:
A notice was sent by registered post to the assessee on 3rd Jan., 1981. Neither unserved AD nor registered envelope has been received back and, therefore, the assessee will be deemed to have been served sufficiently.
2. The Tribunal, Allahabad Bench, Allahabad referred the following question under s. 256(1) of the IT Act, 1961 for opinion of this Court:
"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that where there was a change in the constitution of the firm during the previous year separate assessments should be made, one for the period prior to the change in the constitution of the firm and another for the post reconstitution period".
3. From a perusal of the order dt. 10th Sept., 1979 of the Tribunal, it appears that the Tribunal found that the partnership at the time of the death of one of the partners, namely, Sri Badri Prasad, was constituted by three partners and that when Badri Prasad died, only two partners were left behind. On these facts, the ITO found that there was only a change in the constitution of the firm and, therefore, single assessment was made on the assessee-firm. However, the appellate authority accepted the contention of the assessee-firm that it stood dissolved upon the death of one of the partners and reversed the order of the ITO in this regard and, therefore, it was held that two assessments; one for the period prior to the death and the other for the post death period, were required to be made. On further appeal, the Tribunal affirmed the order of the appellate authority.
4. No case has been set up by the Revenue that the firm would not have dissolved despite the death of one of the partners in view of any agreement to the contrary in the partnership. That being so, we are of the opinion that the Tribunal rightly affirmed the order of the appellate authority that on the death of one of the partners, the firm stood dissolved and, therefore, two assessments were required to be made.
5. In view of the above reasoning, we answer the aforementioned question in the affirmative, that is, in favour of the assessee and against the Revenue.
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Title

Commissioner Of Income Tax vs Shree Agarwal Flour & Oil Mills

Court

High Court Of Judicature at Allahabad

JudgmentDate
30 April, 1997