Law:

Section:

Section 184 of the Income-tax Act, 1961 – Firm – Position prior to 1-4-1993 – Assessment year 1962-63 – Assessee-firm was constituted by deed dated 18-3-1960 with four partners, – As per said deed, in case of death or insolvency of any of partners, partnership was to be carried on by remaining partners – In course of very first year of its existence one of partners died – Business was continued by remaining partners without executing any fresh deed of partnership or entering into any written agreement about division of profits – ITO allowed initial registration for assessment year 1961-62 – For assessment year in question, assessee put in two applications for original registration in form Nos. 11 and 11A and also filed declaration under section 184(7) in Form No. 12 for renewal of registration – Whether for assessment year in question original deed dated 18-3-1960 was of no avail as in partnership which was working during relevant accounting year there was change in constitution as well as in shares of respective partners – Held, yes – Whether in absence of instrument of partnership among surviving partners specifying their revised shares, provisions of section 184(7) were not attracted – Held, yes FACTS By partnership deed dated 18-3-1960, four persons, entered into an agreement to carry on restaurant business. The partnership was to commence with effect from 1-1-1960 and its accounting year was to be the calendar year. The said deed provided that in the case of death or insolvency of any of the partners, the partnership would be carried on by the remaining partners alongwith any additional partner or partners. On 3-10-1960, one of the partners expired. The business was, however, continued to be carried on by the remaining partners without executing any fresh deed of partnership or entering into any written agreement about the division of profits. For the assessment year 1961-62, the ITO allowed initial registration. For the assessment year 1962-63, the assessee put in two applications for original registration in Form Nos. 11 and 11A. The assessee also filed a declaration under section 184(7) in Form No. 12 for obtaining renewal of registration. In all these…

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