Cit Vs. Dass Bros.

Cit vs Dass Bros.

Type Court Judgment Court Allahabad Decided Jan 03, 2003

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Citation: sooperkanoon.com/492251
Court: Allahabad High Court
Decided On: Jan 03, 2003
Case Number: IT Ref. No. 199 of 1983 3 January 2003
Subject: Direct Taxation

Case Summary

AI-generated summary - not the official court judgment text.

In the Allahabad High Court M. Katju & Prakash Krishna, JJ. - LAND ACQUISITION ACT, 1894 [C.A. No. 1/1894]. Section 4; [Sushil Harkauli, S.K. Singh & Krishna Murari, JJ] Acquisition of land Held, Court cannot issue a Writ of Mandamus directing the State Authorities to acquire a particular land. Land acquisition i...

Key legal issue: Direct Taxation

Parties & Advocates

Appellant / Petitioner

Cit

Respondent

Dass Bros.

Legal References

Reported In: [2003]130TAXMAN599(All)

Excerpt

.....the provisions of land acquisition act, 1894. it would, however, be open to the court in exercise of that power to invite the attention of the executive to any public purpose and the need for land for meeting that public purpose and to require the executive to take a decision, even a reasoned decision, with regard to the same in accordance with the statutory provisions, perhaps even within a reasonable time frame. however, the power of the court under article 226 must necessarily stop at that. thereafter, if the decision taken by the executive is capable of challenge and, there exist appropriate legal grounds for such challenge, it may also be open to the court to quash the decision and to require reconsideration. but no direction in the nature of mandamus whether interim or final can be issued by the court under article 226 to the executive to necessarily acquire a particular area of a particular piece of land for a particular public purpose. section 4; compulsory acquisition of land powers of state government held, renewal of lease in favour of petitioners would not take away power of state government of compulsory acquisition of land. renewal of lease would at best be taken into consideration for determining quantum of compensation. orderm. katju, j.heard learned counsel for the parties.2. this is an income-tax reference under section 256(1) of the income tax act in which the following questions of law have been referred to us for our opinion :'1. whether, on the facts and in the circumstances of the case, the tribunal was correct in holding that section 187(2) of the income tax act, 1961 did not apply in the instant case and hence a single assessment could not be made on the income for the period 1-4-1979 to 31-3-1980 ?2. whether the tribunal was justified in confirming the order of the appellate assistant commissioner directing the income tax officer to make two separate assessments for the income of the periods 1-4-1979 to 30-6-1979 and 1-7-1979 to 31-3-1980 ?'3. the assessee is a firm and the relevant assessment year is 1980-81. the firm was constituted under a deed of partnership dated 4-7-1977 in which there were two partners, viz., ashok kumar and nirmala dass. on 1-7-1979 a new deed was drawn up and one mr. pankaj kumar dass was taken in as another partner. two returns were filed for the relevant assessment year, one for the period 1-4-1979 to 30-6-1979 and the other for the period 1-7-1979 to 31-3-1980. the income tax officer, however, held that it was only change in the constitution of the firm and hence there will be a single assessment. in appeal, the appellate assistant commissioner set aside the assessment order and directed two assessment orders and that order was upheld by the tribunal.4. section 187(2) of the income tax act, 1961 states :'(2) for the purposes of this section, there is a change in the constitution of the firm(a) if one or more of the partners cease to be partners or one or more new partners after admitted in such circumstances that one or more of the person who were partners of the firm before the change continue as partner or partners after the change; or(b) where all the partners continue with a change in their respective shares or in shares of some of them.....

Full Judgment

ORDER

M. Katju, J.

Heard learned counsel for the parties.

2. This is an income-tax reference under section 256(1) of the Income Tax Act in which the following questions of law have been referred to us for our opinion :

'1. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that section 187(2) of the Income Tax Act, 1961 did not apply in the instant case and hence a single assessment could not be made on the income for the period 1-4-1979 to 31-3-1980 ?

2. Whether the Tribunal was justified in confirming the order of the Appellate Assistant Commissioner directing the Income Tax Officer to make two separate assessments for the income of the periods 1-4-1979 to 30-6-1979 and 1-7-1979 to 31-3-1980 ?'

3. The assessee is a firm and the relevant assessment year is 1980-81. The firm was constituted under a deed of partnership dated 4-7-1977 in which there were two partners, viz., Ashok Kumar and Nirmala Dass. On 1-7-1979 a new deed was drawn up and one Mr. Pankaj Kumar Dass was taken in as another partner. Two returns were filed for the relevant assessment year, one for the period 1-4-1979 to 30-6-1979 and the other for the period 1-7-1979 to 31-3-1980. The Income Tax Officer, however, held that it was only change in the constitution of the firm and hence there will be a single assessment. In appeal, the Appellate Assistant Commissioner set aside the assessment order and directed two assessment orders and that order was upheld by the Tribunal.

4. Section 187(2) of the Income Tax Act, 1961 states :

'(2) For the purposes of this section, there is a change in the constitution of the firm

(a) if one or more of the partners cease to be partners or one or more new partners after admitted in such circumstances that one or more of the person who were partners of the firm before the change continue as partner or partners after the change; or

(b) where all the partners continue with a change in their respective shares or in shares of some of them :

Provided that nothing contained in clause (a) shall apply to a case where the firm is dissolved on the death of any of its partners.'

From the above provision it is evident that even if one of the partners of the firm continues in the firm, it will be reconstitution and not dissolution of the firm. Thus, if there is a partnership firm in which there are three partners A, B and C and at some point of time partners B and C leave the firm and D and E become partners of the firm, yet it will be a case of reconstitution and not dissolution of the firm because A is continuing in the firm. Hence, in view of the provisions of section 187(2) of the aforesaid Act it is a case of reconstitution and not dissolution of the firm.

5. In the present case there is an addition of one more partner but two old partners continued. Hence, in view of the provisions of section 187(2) of the Act it is reconstitution of the firm and accordingly there has to be a single assessment in view of the decision in the case of Vishwanath Seth v. CIT (1994) 146 ITR 249.

6. Hence, we answer the questions referred to us in the negative, i.e., the favour of the department and against the assessee.

Same Court & Year Allahabad · 2003 Same Parties Cit vs Dass Bros. Same Subject Direct Taxation

Direct Taxation