Commissioner of Income Tax vs Amar Iron Stores

Yatindra Singh, J.

This is a reference u/s 256(2) of the Income Tax Act on the direction of this court in which the following question has been referred to us for opinion :

"Whether on the facts and in the circumstances of the case, the Tribunal was legally correct in upholding the order of the Commissioner (Appeals) that two assessments should have been made and the income of Rs. 1,14,420 for the period 21-9-1976 to 31-3-1977 as deleted from the hands of the appellant-firm be assessed separately ?"

The assessee in this case is a firm and the assessment year involved is 1977-78.

One of the partners Gulshan Kumar died on 18-9-1976 and there is no mention in the Partnership deed that the partnership will continue after the death of any partner. In view of this and the decision given by the Supreme Court in COMMISSIONER OF INCOME TAX Vs. EMPIRE ESTATE., , the partnership stood dissolved and as such there should be two assessments.

In view of this we answer the question in the affirmative, i.e., in favour of the assessee and against the department.