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A.L.A. Firm vs Commissioner Of Income Tax, Madras on 21 February, 1991

5. In response to the show-cause notice, it was submitted by the assessee that it is a case only of a change in the constitution of the firm and not a case of dissolution. It was further stated that the assessments have been made under special proviso to section 187(2) of the Act. It was further contended that if the valuation of the closing stock is enhanced, set off of the same will have to be given in the second period and more or less there would be no effect of the same. It was argued that revaluation of stock could be made if the business of the firm had come to an end. Reference was made to the decision in A.L.A. Firm v. CIT [1991] 189 ITR 285 (SC) and it was argued that the decision (supra) was distinguishable on facts. The submissions of the assessee did not find favour with the Commissioner. Relying on the proviso inserted by the Taxation Laws (Amendment) Act, 1984 with retrospective effect from 1-4-1975, the Commissioner observed that in the instant case business of one firm had been succeeded by that of another and that there is termination to business activity of the earlier firm. He also rejected the assessee's contention regarding set off observing that the two firms are different entities and are of different constitution. Quoting from the decision (supra) of the Apex Court, the Commissioner held that the stock should have been valued at the market price and the Assessing Officer erred in accepting the stock as shown by the assessee. He, therefore, set aside the assessment on the point.
Supreme Court of India Cites 34 - Cited by 276 - Full Document

Commissioner Of Income-Tax vs Jasumal Devandas on 29 July, 1985

In the case of CIT v. Jasumal Devandas [1985] 156 ITR 551, their Lordships of Madhya Pradesh High Court have held that where a firm was dissolved on the death of any one of its partners and there was no contract to the contrary in the partnership deed, for and from assessment year 1975-76, it would be a case one of succession governed by section 188 and not a case of change in the constitution governed by section 187. In the instant case, the assessee has not brought on record the partnership deed executed on 16th November, 1982. However, the assessee has filed a copy of computation of income of the assessee-firm for the period from 23-10-1987 to 13-11-1988 [copy at page (sic)] :
Madhya Pradesh High Court Cites 8 - Cited by 3 - J S Verma - Full Document
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