COMMISSIONER OF INCOME TAX Vs. A D QURESHI

JUDGEMENT

(1.) Sri Bharat Ji Agrawal and Sri A. N. Mahajan appeared for the Department. The assessee has been served notice but none has appeared.

(2.) This is an income-tax reference under Section 256(2) of the Income-tax Act, 1961 ("the Act"), in pursuance of the direction of the High Court. The following questions have been referred to us for our opinion :

(3.) The assessee is a firm and the relevant assessment year is 1976-77. The firm consisted of three partners and two minors were admitted to the benefits of partnership. After December 17, 1975, both minors were dropped and five new partners were taken into the partnership. The question whether there was dissolution or mere reconstitution of the firm has to be answered in light of Section 187 of the Act. It is as follows :