- (1.) IT Reference No. 75 of 1983 This reference under S. 256(1) of the INCOME TAX ACT, 1961, at the instance of the Revenue is to decide the following question of law, namely : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that provisions of S. 187 (2) were not applicable ?"
(2.) THE relevant asst. year 1977 -78. The material facts are these. A partnership firm known as Ganesh Jain Bhojanalaya, Beawar, consisted of four partners, out of whom one, namely, Chandmal, expired on August 1, 1976, during the relevant period. A new firm was constituted w.e.f. August 2, 1976, and a new partner, Manakchand, was inducted into the firm. The assessee filed two returns, one up to August 1, 1976, and the other for the period commencing from August 2, 1976. The ITO clubbed the income of the two periods and made one assessment resorting to s. 187(2) of the Act treating it as a case of a mere change in the constitution of the firm. The assessee's appeal to the AAC was allowed holding that two assessments were to be made for the two periods, one up to August 1, 1976, and the other commencing on August 2, 1976. The Tribunal has affirmed the AAC's view by rejecting the Revenue's appeal. Hence, this reference at the instance of the Revenue. The present is a case governed by the amended S. 187 as it stands after the insertion of the proviso in sub -s. (2) of S. 187 retrospectively w.e.f. April 1, 1975. The view taken in such a situation on the basis of the newly inserted proviso in sub -s. (2) of S. 187 by this Court in CIT vs. Assumal Veerumal (1987) 65 CTR (Raj) 301 : (1988) 170 ITR 489 (Raj), is that it is a case of succession governed by S. 188 of the Act and not of a mere change in the constitution of the firm to which S. 187 applies. Following that decision, it is to be held that the Tribunal's view is justified.
(3.) CONSEQUENTLY , the reference is answered against the Revenue and in favour of the assessee by holding that the view taken by the Tribunal is justified. No costs. IT Ref. No. 39 of 1985 : This reference under S. 256(1) of the INCOME TAX ACT, 1961, at the instance of the Revenue is to decide the following question of law, namely: "Whether, on the facts and in the circumstances of the case, the Tribunal is justified in holding that it was not a case of change in the constitution of the firm under S. 187(2) of the INCOME TAX ACT, 1961, and consequently, in directing the ITO to make two assessments for the two periods?" ;