COMMISSIONER OF INCOME TAX Vs. GANESHDAS JAGDISH PRASAD

JUDGEMENT

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

(2.) THE relevant assessment year is 1972-73. THE partnership consisted initially of four partners, namely, Sv. Jainarain, Tejraj, Jagdish Prasad and Amarchand, each having equal share. THE deed of partnership was executed on June 3, 1961. On February 11, 1971, during the relevant assessment year, one of the partners, Tejraj, expired and the three surviving partners admitted the minor son of Tejraj to the benefits of partnership and took over the assets and liabilities of the firm. A new partnership deed was drawn up on February 25, 1971. Two returns of income were filed, one for the period ending on February 11, 1971 and the other for the remaining period of the accounting year. THE assessee claimed that separate assessments had to be made for these two periods. THE Income-tax Officer rejected the contention holding that it was a case of a mere change in the constitution of the assessee-firm in terms of Section 187(2)(a) of the Act and as such only one assessment had to be made for the entire assessment year. THE assessee's appeal to the Appellate Assistant Commissioner was, however, accepted upholding the assessee's contention. THE Tribunal has also taken the same view. Hence, this reference at the instance of the Revenue.