Law: Income Tax Act, 1922

Section: 25(4)

Law: Partnership Act, 1932

Section: 40,43,44

Income Tax Act (XI of 1922)--S. 25 (4) read with Partnership Act (IX of 1932), Ss. 40, 43 & 44-"Dissolution" of partnership firm--Exemption from tax-­"Dissolution" and "reconstitution"-Distinct legal concepts--.Court in each case to be satisfied as to whether there has been succession or a mere change in constitution of partnership--Question whether there has been a dissolution of firm and upon such dissolution a new firm has succeeded to business of old firm-Held, depends upon intention of parties to be gathered from documents, if any, executed by and between them and other facts and surrounding circumstances of case. C.I.T v. A.w.Figgies & Co. (1953) 24 ITR 405; 1954 SCR 171; A I R 1958 S C 455 and 1953 S C J 635 cited but not examined. JUDGMENT TULZAPURKER, J.- This appeal at the instance of Commissioner of income-tax and by a certificate granted by the Calcutta High Court raises the question whether the respondent-assessee is entitled to relief under section 25 (4) of the Indian Income-tax Act, 1922 for the assess­ment year 1959-60 which in turn depends upon the proper answer to the question whether on the facts and circumstances of the case and on a proper construction of the deed dated March 30, 1959 it is a case of pare reconstitution of the old firm or' a new firm succeeding to the business of the old firm entitling the respondent-assesses to claim the relief ? 2. The undisputed facts giving rise to the above question are these: Messrs Pigot Champan & Co. is a firm of foreign exchange brokers which lead been operating an Calcutta for a very long time. There is no dispute that the firm had been taxed ors its business income under the Indian Income-tax Act, 1918 arid that the other conditions laid down in section 5 (4) of the 191-2 Act for entitling an assessee to the relief under that provision are satisfied. The constitution of the firm had undergone several changes in the past the firm was reconstituted for short periods and whenever any partner retired he gave up his claim to sire partnership assets which vested in the continuing partners. A deed of partnership was executed by and between Rogers Haywood. Leonard Mark Blomenstok, H. G.…

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