COMMISSIONER OF INCOME TAX Vs. SRI HANUMAN INDUSTRIES

JUDGEMENT

(1.) AT the instance of the Revenue, the Tribunal referred the following question relating to the asst. yr. 1978-79 for the opinion of this Court:-

(2.) THE ITO clearly stated that in paragraphs 10 and 11 of the partnership deed dt. 1st Oct., 1974, it was clearly stated that death would not result into dissolution of the partnership. Therefore, the factual position is that there was an agreement to the contrary in the partnership deed that despite death of one of the partners the firm will not dissolve. The AO, therefore, held that there was no dissolution of the firm upon the death of one of the partners and that there was only a change in the constitution. He, accordingly, made a single assessment for the entire accounting period on the assessee-firm.

(3.) THE only question for consideration is whether two separate assessments are required to be made in a case where there was an agreement to the contrary that the firm will not stand dissolved despite death of one of the partners. This legal position is fully concluded by the Supreme Court in CIT vs. Empire Estate (1996) 218 ITR 355/85 Taxman 153. In this case, the Supreme Court observed as under:-