COMMISSIONER OF INCOME TAX Vs. GOPI TALKIES

JUDGEMENT

(1.) THIS is a reference under Section 256(1) of the Income-tax Act, 1961, at the instance of the Revenue to answer the following question of law, viz. :

(2.) THE material facts are these : THE assessee claimed status as a registered firm in the return filed on June 30, 1975, for the assessment year 1975-76 for which the accounting period ended on November 13, 1974. During this period, one of the partners of the firm, viz., Gopiram, died on October 2, 1974. THE assessee initially claimed the status of a registered firm for the entire period, including the period subsequent to the death of Gopiram. According to the terms of the partnership contained in the partnership deed, the provisions of the Partnership Act were applicable in respect of matters not specifically provided in the deed and in case of death of any partner, the firm was not to be dissolved, but the successors or representatives of the deceased partners were to be admitted in the firm. THE Income-tax Officer treated the assessee as an unregistered firm for the entire period.

(3.) CONSEQUENTLY, the reference is answered against the Revenue and in favour of the assessee as under :