Commissioner of Income Tax vs Rasulpur Sugar Industries

The following question has been referred by the Income Tax Appellate Tribunal for the assessment year 1973-74 u/s 256(1) of the Income Tax Act, 1961, for the opinion of this court :

" Whether, on the facts and in the circumstances of the case, the Tribunal was right in law, in directing the Income Tax Officer to make two assessments for the two different periods separately ?"

The Tribunal has recorded a finding that one of the partners, Laxmi Narain Agarwala, died during the accounting year relating to the assessment year 1973-74 and then another partnership deed was executed. The Appellate Tribunal recorded a categorical finding of fact that in the earlier deed there was no stipulation that despite the death of one of the partners, the old firm will continue. The Tribunal, therefore, concluded that upon the death of one of the partners, the earlier firm stood dissolved and a new firm under the second partnership deed came into effect. No exception can be taken to such finding of the Appellate Tribunal.

We, therefore, answer the aforementioned question in the affirmative, i.e., in favour of the assessee and against the Revenue.