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SECTION 188, READ WITH THE PROVISO TO SECTION 187(2) [AS INSERTED BY THE TAXATION LAWS (AMENDMENT) ACT, 1984] OF THE INCOME-TAX ACT, 1961 - FIRM - REGISTRATION - SUCCESSION OF ONE FIRM BY ANOTHER FIRM - WHETHER A FIRM STANDS DISSOLVED ON DEATH OF ANY OF ITS PARTNERS AND IF THEREAFTER THERE IS A FRESH PARTNERSHIP DEED, A NEW FIRM COMES INTO EXISTENCE AND, THEREFORE, THERE SHOULD BE TWO SEPARATE ASSESSMENT PROCEEDINGS IN RESPECT OF OLD FIRM AND NEW FIRM, IN RELEVANT ASSESSMENT YEAR - HELD, YES Facts The Tribunal had taken the view that the anterior partnership firm stood dissolved on the death of one of the partners of the assessee-firm on 6-2-1977 and that after the death of the said partner, a new firm came into existence from 14-2-1977, in accordance with the partnership deed dated 17-2-1977 and, therefore, there should have been two separate assessments on the assessee for the assessment year 1978-79. On reference, the revenue challenged the view of the Tribunal : Held In a number of cases, this Court has taken the view that the earlier firm stands dissolved on the death of any of its partners and if there is afresh partnership deed, a new firm comes into existence and that there should be two separate assessment proceedings, in respect of the old firm and the new firm. The same view has been given recognition by the Legislature by adding the proviso to section 187( 2) by the Taxation Laws (Amendment) Act, 1984, with retrospective effect from 1-4-1975. As the present case related to the assessment year 1978-79, the said amendment was attracted to the instant case. Thus, the Tribunal was justified in holding that there should have been two separate assessments, one anterior to the death of one of the partners and another posterior to it. Case review Addl. CIT v. M.K.M. Moosa Bhoy Amin [1984] 148 ITR 89 (Raj.), CIT v. Hind Agencies [1984] 148 ITR 94 (Raj.), Addl. CIT v. Emery Stone Mfg. Co. [DB IT Reference No. 4 of 1974, dated 5-12-1984] and Surana & Co. v. CIT [DB IT Reference No. 5 of 1977, dated 11-1-1985] followed. Cases referred to Nandlal Sohanlal v.CIT [1977] 110 ITR 170 (Punj. & Har.) (FB), Addl. CIT v. Vinayaka Cinema [1977] 110 ITR 468 (AP)…

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