B.P. Jeevan Reddy, C.J. - (1.) NO one appears on behalf of the assessee. Under Section 256(1) of the Income-tax Act, 1961, the Tribunal has stated the following question for our opinion : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that there has been only a change in the constitution of the firm on the death of Sri Kuab Ali and in rejecting the assessee's claim that the firm had dissolved on his death ?"
(2.) THE relevant facts which appear from the statement of the case are the following. THE assessee-partnership firm was constituted by a deed of partnership dated September 5, 1966. It consisted of ten partners one of whom was Sri Ruab Ali. Clause 13 of the deed provided that the firm shall not automatically stand dissolved on the death of any of the partners and that it may be continued by the legal heir or heirs of the deceased partner and the surviving partners. Ruab Ali died on June 29, 1970. After his death, his widow joined the firm and the business was carried on by her along with the other nine partners. However, on July 27, 1970, a fresh deed of partnership was executed. While stating in the preamble that the firm was not dissolved on the death of Ruab Ali, yet it purported to say that the firm stood dissolved with effect from June 29, 1970, on the death of Ruab Ali. THE Tribunal found that there was absolutely no evidence to show any such dissolution and refused to place any reliance on the deed of dissolution. On the above facts, it is evident that what happened in this case was only a reconstitution of the firm and that it was not a case of succession of one firm by another. We reiterate that the Tribunal refused to believe, accept or act upon the deed of dissolution. In short, the deed of dissolution was rejected. For the above reasons, the question referred is answered in the affirmative, i.e., in favour of the Revenue and against the assessee. There shall be no order as to costs.;