| Case ID |
3b4f07b5-46e9-4391-bb8b-38df8870f0a6 |
| Body |
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| Case Number |
INCOME-TAX REFERENCE No. 20 OF 1972 |
| Decision Date |
May 24, 1977 |
| Hearing Date |
|
| Decision |
The court held that the provisions of the Indian Partnership Act, 1932, indicate that a partnership does not have the status of a legal person. The death of a partner typically leads to the dissolution of the firm unless otherwise stated in the partnership deed. In this case, a new partnership deed was executed after the death of one partner, which included the deceased partner's son. The Income Tax Officer made a single assessment for both periods, as the case was viewed as a change in the constitution of the firm rather than a succession. The court affirmed the decision to allow one assessment under section 187(2) of the Income-tax Act, rejecting the argument that the old firm was dissolved upon the death of the partner. |
| Summary |
This case revolves around the interpretation of section 187 of the Income-tax Act, 1961, concerning the change in the constitution of a partnership firm following the death of a partner. The decision underscores the legal distinction between the continuity of business operations and the personnel involved in the firm. The court concluded that the firm continued to exist legally despite the change in partners, as the partnership deed did not stipulate that a partner's death would dissolve the partnership. The ruling emphasizes the importance of partnership deeds in determining the continuity and assessment of tax obligations. This decision is significant for tax implications in partnership structures, particularly when partners pass away or are replaced. The judgment clarifies the legal framework surrounding the assessment of firms under the Income-tax Act and the Indian Partnership Act, providing essential guidance for future cases involving similar circumstances. Key terms related to partnership law, income tax assessment, and legal continuity of firms are prevalent throughout the case. |
| Court |
Punjab and Haryana High Court
|
| Entities Involved |
Not available
|
| Judges |
O. Chinnappa Reddy,
S.S. Sandhawalia,
Bhopinder Singh Dhillon,
M.R. Sharma,
Harbans Lal
|
| Lawyers |
Kartar Singh,
Lakhinder Singh,
D.N. Awasthy,
B.K. Jhingan
|
| Petitioners |
Nandlal Sohanlal
|
| Respondents |
Commissioner of Income Tax
|
| Citations |
1977 SLD 1456,
(1977) 110 ITR 170
|
| Other Citations |
C.A. Abraham v. ITO [1961] 41 ITR 425 (SC),
D.N. Banerji v. P.R. Mukherjee AIR 1953 SC 58,
Bhagwanji Morarji Goculdas v. Alembic Chemical Works Co. Ltd. [1948] 18 Comp Cas 205; AIR 1948 PC 100,
Central India Spinning, Weaving and Manufacturing Co. Ltd. v. Municipal Committee AIR 1958 SC 341,
Chesterman v. Federal Commissioner of Taxation [1926] AC 128 (PC),
CIT v. S.V. Angidi Chettiar [1962] 44 ITR 739 (SC),
CIT v. A.W. Figgies and Co. [1953] 24 ITR 405 (SC),
CIT v. Kirkend Coal Co. [1969] 74 ITR 67 (SC),
CIT v. Kulu Valley Transport Co. P. Ltd. [1970] 77 ITR 518 (SC),
CIT v. Shahzada Nand and Sons [1966] 60 ITR 392 (SC),
Dulichand Laxminarayan v. CIT [1956] 29 ITR 535 (SC),
Jabalpur Ice Manufacturing Association v. CIT [1955] 27 ITR 88 (Nag)
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
187,
188
|