DUNGARSIDAS KALURAM Vs. ADDITIONAL COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) BY this reference under Section 256(1) of the I.T. Act, 1961, hereinafter called "the Act", the Income-tax Appellate Tribunal, Indore Bench, Indore, has referred the following question of law to this court for its opinion:

(2.) THE material facts giving rise to this reference briefly are as follows : THE assessee is M/s. Dungarsidas Kaluram and the assessment year in question is 1971-72. THE assessee filed two returns of income--the first up to 4th August, 1970, when one of the two partners of the firm, namely, Chhaganlal, died and the other from 5th August, 1970, onwards, when the surviving partner formed another partnership with Smt. Rukmanibai, widow of Chhaganlal, and one Sureshchandra. THE ITO made only one assessment for the entire accounting, period. On appeal, the AAC found that after the death of Chhaganlal, one of the two partners of the firm, the firm ceased to exist and another firm came into existence. THE AAC, therefore, held that two separate assessments had to be made. Against the order of the AAC the department preferred an appeal before the Tribunal. THE Tribunal held that by virtue of the provisions of Section 187(2)(a) of the Act there was a change in the constitution of the firm and only one assessment had to be made for the entire accounting period. In this view of the matter, the Tribunal set aside the order of the AAC and resorted to the order passed by the ITO. On an application made in that behalf, the Tribunal has referred the aforesaid questions of law to this court for its opinion.