COMMISSIONER OF INCOME TAX Vs. BHOOPATHI MILLS

JUDGEMENT

(1.) THE questions referred by the Tribunal in this case are as follows :

(2.) THE facts on which the Tribunal gave a finding of fact are that there was originally a firm consisting of six partners and, by document dt. 13th Dec., 1973, according to the Tribunal, there was a dissolution (though the document was shown as a release deed), and that there was no closing stock as on 6th Dec., 1973, and the last purchase by the assessee -firm of kappas was on 8th July, 1973, of cotton seed on 22nd May, 1973, and of lint on 27th May, 1973. The Tribunal found that the last sales were effected on 27th June, 1973, and that the accounts were thereafter closed on 6th Dec., 1973, and certain amounts were paid to the retiring partner. On these facts, the Tribunal drew an inference that by conduct, the partners have dissolved the firm even though by agreement only one partner had retired. On that finding of fact, the Tribunal applied S. 188 and accepted the claim of the assessee for making two assessments, one for the period up to 6th Dec., 1973, and the other for the period from 7th Dec., 1973, to 31st March, 1974.

(3.) NO doubt, a dissolution can take place by conduct. But, as in this case, when there is a written agreement and the subsequent conduct of the parties does not contradict the written agreement, the finding of the Tribunal that there was in fact a dissolution is vitiated, because, there is nothing to show that there was a determination of the rights and liabilities of the continuing partners.