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Bearing these principles in mind we have to consider as to when the succession occurred in this case whether on the date of the death of Kotaiah or on the date when the sale was effected in favour of the limited company. The contention presented on behalf of the assessee both before the Revenue and the Appellate Tribunal and before us is that the death of Kotaiah does not determine here the date of succession for the reason that Durgamba, the legatee under Kotaiahs will, carried on the business pursuant to the directions of the will.

As substantiating this proposition, learned counsel for the assessee called in aid the decision of the Supreme Court in Executors of the Estate of J.K. Dubash v. Commissioner of Income-tax. In that case the assessees were the executors of the will of a person who died in April, 1942. They were directed to carry on the testators business as a going concern as if they are absolute owners but without being responsible for loss for a particular period. The testator further directed them to sell the business to a relation of his or to any other person as a going concern. In such circumstances the executors claimed the benefit of section 25(4) for the period between the date of the death of the testator and the date of sale of the concern which was effected by them as per the directions in the will. The department took the stand that the assessee could get the benefit of section 25(4) only for the period between the end of the previous year and the date of the death of the testator when the executors succeeded to the business. The Supreme Court, in an appeal from the judgment of the High Court of Bombay which answered the question against the assessee, ruled that succession took place when the testator dies, since his whole estate including the business vested in the executors and they carried on the business within the meaning of section 3 read with section 10. One of the learned judges (Patanjali Sastri J. as he then was) ruled that the expression "succeeded by another person" in section 26(2) and section 25(4) covered not only succession inter vivos but also the case of succession on death.

The next point raised by the learned counsel for the assessee was that the death of Kotaiah did not bring about dissolution of the partnership but the partnership continued as before with a mere change in the constitution of the concern, there being only a change of the personnel of the partners, and so succession could be regarded as having taken place only when the business was transferred to the newly floated company. This is sought to be established by the following contention. The general rule laid does in section 42 of the Indian Partnership Act that the death of one of the partners results in dissolution of partnership in inapplicable to the present case as there was a contract to the contrary within the meaning of that very section. By reason of section 47 of the Partnership Act the partnership must be deemed to have continued despite the death of Kotaiah.

This statement of law does not indicate that the representatives of the deceased partner could also join the surviving partner for winding up the affairs of the firm. All that is stated there is that the surviving partners have a duty and power to complete all transactions having regard to the relationship between the surviving partners and the heirs of the deceased partner. For these reasons, our conclusion is that section 47 of the Indian Partnership Act does not enable the assessee to claim that the partnership continues notwithstanding the death of one of the partners. It follows that the old partnership was succeeded by Veera Sarabhaiah Durgamba in the capacity of owners and as such succession took place for purposes of section 25(4) on the death of Kotaiah and the assessee is entitled to the benefit of that section only for the period from 1st April, 1946, to 13th May, 1946.