- (1.) THE Income-tax Appellate Tribunal, Delhi Bench "D", Delhi, has referred the following questions under Section 256(2) of the Income-tax Act, 1961, for the opinion of this court : "1. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was correct in law in not accepting in law the view of the Income-tax Officer and the Appellate Assistant Commissioner that it was a case of merely change in the constitution of the firm within the meaning of Section 187(2) of the Income-tax Act, 1961 ? 2. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was correct in law in not confirming the action of the Income-tax Officer in clubbing the income of both the periods ? 3. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was correct in law in directing the Appellate Assistant Commissioner to dispose of the legal issue in accordance with the opinion expressed by the Allahabad High Court in Dahi Laxmi Dal Factory v. ITO [1976] 103 ITR 517 [FB] ?"
(2.) BRIEFLY, the facts are that a partnership was formed under a partnership deed dated March 30, 1964, by three partners, namely, Suraj Bhan, Mahavir Prasad and Mahendra Kumar, having one-third share each, The business was being carried on by the partnership in the name and style : "Manohar Glass Works". On August 20, 1971, the partners agreed to dissolve the partnership in view of the stipulations made in Clause (4) of the partnership deed dated March 30, 1964. Clause 4 of the dissolution deed stated that Suraj Bhan and Mahavir Prasad were paid off the amounts lying to their credit in their capital accounts in lieu of surrender of their rights in the properties and assets of the firm. On August 21, 1971, a new partnership deed was drawn up between Mahendra Kumar and Suraj Bhan and also one minor (Sunil Kumar, son of Mahendra Kumar) who was admitted to the benefits of the partnership. For the assessment year 1972-73 (relevant herein), two returns were filed ; the first one was for the period Diwali 1970 to August 20, 1971, and the second relating to the period commencing from August 21, 1971 to March 31, 1972.
(3.) THE Income-tax Officer made a single assessment on the new firm. The Appellate Assistant Commissioner confirmed the order of the Income-tax Officer.;