COMMISSIONER OF INCOME TAX Vs. RAMESH BISCUIT FACTORY

JUDGEMENT

(1.) THIS is a reference under Section 256(1) of the Income-tax Act, 1961 (for short, "the Act"). The following question of law has been referred for the opinion of this court :

(2.) THE brief facts are that in the previous year relevant to the assessment year 1976-77, to which the dispute pertains, up to September 30, 1975, the assessee-firm was comprised of four partners which included two minors admitted to the benefits of partnership. With effect from September 30, 1975, the minors admitted to the benefits of partnership retired from the firm. THE remaining two partners along with one Smt. Parmeshwari Devi executed a new deed of partnership with effect from October 1, 1975. THE assessee claimed that two separate assessments were to be made in respect of two broken periods, i.e., one for the period April 1, 1975, to September 30, 1975, and the other for the period October 1, 1975, to March 31, 1976. THE assessee accordingly filed two sets of returns for the respective periods and separate accounts. However, the Income-tax Officer held that it was a case of mere change in the constitution of the firm and made one assessment for the period before and after the reconstitution. In appeal, the Appellate Assistant Commissioner upheld the claim of the assessee in view of the decision of this court in CIT v. Shiv Shanker Lal Ram Nath [1977] 106 ITR 342 and directed the Income-tax Officer to frame two assessments afresh on the basis of two returns filed by the assessee for the two periods and in accordance with law. THE Department appealed to the Income-tax Appellate Tribunal. THE appeal was dismissed, saying that there was no scope for interference as the view taken by the Appellate Assistant Commissioner was in consonance with the decision of this court relied upon by the Appellate Assistant Commissioner. It is in this background, at the instance of the Revenue that the aforementioned question has been referred to this court.

(3.) IN view of the above discussion, the decision of the income-tax Appellate Tribunal cannot be upheld.