COMMISSIONER OF INCOME TAX Vs. DELHI METAL STORE

JUDGEMENT

(1.) AT the instance of the Revenue the Tribunal has referred under S. 256(1) of the IT Act, 1961 (for short the Act), the following question for the opinion of this Court :

(2.) THE material facts as found and narrated by the Tribunal in the statement of the case are as follows :

(3.) IT appears from the preamble of the deed of dissolution dt. 2nd May, 1969, that on account of some differences between the partners, they decided to dissolve the firm. Accordingly, on 2nd May, 1969 the partners of the firm drew two deedsone of them was the deed of dissolution of the firm w.e.f. 30th April, 1969. By this dissolution deed, all the assets and liabilities of the firm were to be taken over by two partners and the other partners were to be paid the amount standing to their credit in the balance sheet. The other deed was an instrument of partnership by which a new partnership firm was formed with the above two partners along with two other persons. In addition, two minors were also admitted to the benefits of the firm. The terms and conditions of the newly constituted firm were set out in the new partnership deed. The name of the firm and the nature of the business, however, continued to be the same as before. The new firm commenced its business from 1st May, 1969. The accounting period of the original as well as the new firm was the calendar year.