JUDGMENT Srinivasa Iyengar, J.— The Income Tax Appellate Tribunal, Bangalore Bench, has referred the following question for the opinion of this court : "Whether, on the facts and in the circumstances of the case, the allocation of profit assessable in the case of the firm M/s. N. S. Corporation, for the assessment year 1973-74, by taking the share of each partner at Rs. 14,356 for the first period and at Rs. 35,573 for the second period is in accordance with law ?" 2. M/s. N. S. Corporation was a partnership firm consisting of 8 partners up to August 4, 1972 on which date one of the partners, Ramachandra Shastry, passed away. There was thus a change in the constitution of the firm and the firm continued with the 7 surviving partners and a deed of partnership was also executed in that behalf. Prior to the death of Ramachandra Shastry as well as subsequently, the partner of the firm were entitled to share the profit and loss equally. The question referred to this court involves the method to be adopted for the allocation of the profits between the partners in the two periods, i.e., prior to and subsequent to, the change in the constitution of the firm. 3. The ITO computed the total income of the firm for the relevant previous year at Rs. 4,79,900. The tax payable thereon was Rs. 1,16,031. He had also ascertained the income of the firm for the two periods viz., for the period April 1, 1972, upto August 4, 1972, and from August 4, 1972, to March 31, 1973, at Rs. 1,51,515 and Rs. 3,28,382. He computed the tax payable in respect of these two periods at Rs. 36,666 and Rs. 79,365 and deducting these amounts from the income as computed for the two different periods made the allocation among the partners at 1/8 each for the period prior to August 4, 1972, and at 1/7 each for the subsequent period. 4. This was subject to an appeal before the AAC by the assessee, who was one of the partner. It was contended on her behalf that the total tax payable by the firm, namely, Rs. 1,16,031, ought to have been deducted from the income computed for the two periods at Rs. 1,51,515 and Rs. 3,28,382, respectively. The AAC observed that there was no substance in this contention. It was contended on her behalf that the total tax payable by the firm, namely, Rs. 1,16,031, ought to have been deducted from the income computed for the two periods at Rs. 1,51,515 and Rs. 3,28,382, respectively. The AAC observed that there was no substance in this contention. Under s. 67(1)(a) of the I.T. Act, 1961, the tax payable by the firm had to be deducted from the total income of the firm and though the ITO had deducted proportionate tax from the proportionate income for the two periods, the ultimate result was the same. In this view, he dismissed the appeal. 5. On a further appeal to the Tribunal, it was contended that allocation made was not correct. The Tribunal held that in terms of s. 67 of the Act, the tax payable by the firm had to be deducted from the total income of the firm and in the instant case by making such deduction, the balance amount would be Rs. 3,63,870 and this amount had to be apportioned between the partners provided in the proviso to s. 187(1) of the Act. It observed that there was no necessity for reapportioning the tax between the two periods because even if the tax was deducted from the total income and the net figure was apportioned between the two periods in the ratio, as was determined by the ITO, namely, Rs. 1,51,515 to Rs. 3,28,382, the result would be the same, and dismissed the appeal by the assessee. 6. It is contended by Sri Srinivasan, learned counsel for the petitioner, that the proviso to s. 187 would apply only to a case where there is a change in the constitution of the firm on the first day of the accounting year and in that case there would be no difficulty in the apportionment to be made; but in a case where a change in the constitution of the firm takes place in the middle of the accounting year, there would be difficulty and there would not be an apportionment or allocation between the partners. We are unable to agree with this contention. We are unable to agree with this contention. By virtue of the provision in s. 187, the law has enjoined that where at the time of making an assessment, it is found that a change has occurred in the constitution of a firm, the assessment shall be made on the firm as constituted at the time of the making the assessment. Sub-s. (2) of s. 187 states : "For the purpose 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 are admitted, in such circumstances that one or more of the persons 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 the shares of some of them." 7. Therefore, whenever before an assessment is made for any assessment year, it comes to the notice of the ITO that there has been a charge in the constitution of the firm, the assessment has to be made on the firm as constituted at the time of making the assessment. Section 67(1)(a) is as follows : "In computing the total income of an assessee who is a partner of a firm, whether the net result of the computation of total income of the firm is a profit or a loss, his share (whether a net profit or a net loss) shall be computed as follows : (a) any interest, salary, commission or other remuneration paid to any partner in respect of the previous year, and, where the firm is a registered firm or an unregistered firm assessed as a registered firm under clause (b) of section 183, the Income Tax, if any, payable by it in respect of the total income of the previous year, shall be deducted from the total income of the firm and the balance ascertained and apportioned among the partners;..." 8. By making the deduction as enjoined by s. 67(1)(a) of the tax payable by the firm from its total income the balance ascertained would be the amount that has to be apportionment among the partners in respect of the income derived from the firm. By making the deduction as enjoined by s. 67(1)(a) of the tax payable by the firm from its total income the balance ascertained would be the amount that has to be apportionment among the partners in respect of the income derived from the firm. The proviso to sub-s. (1) of s. 187 states that the income of the previous year shall, for purposes of inclusion in the total income of the partners, be apportioned between the partners who in such previous year were entitled to receive the same. 9. The contention of the learned counsel for the petitioner would amount to this : that the partners among whom the apportionment has to be made should have been the partners for the whole of the previous year. Such a contention is not justified. The emphasis upon the apportionment between the partners who in such previous year are entitled to receive the same covers even the person who is a partner for a part of the previous year and he would answer the description of a partner who in such previous year was entitled to receive the income from the firm. This proviso also gives an indication as to the proportion in which the apportionment has to be made. If he was a partner for only a part of the previous year, the apportionment should be made taking not of that particular fact and he would be entitled to a share of the income in proportion to the profit earned during the period he was a partner and the profit divided among all the partners who constituted the firm up to that date. 10. In our opinion, the proviso to s. 187(1) read with the provision in s. 67 recognises the right of a partner who has been a partner of the firm only for a part of the previous year to receive the income proportionate to that period and also limits his liability to tax only on that portion of the income to which he would have been entitled for the restricted period during which he was a partner. The view taken by the Tribunal that the correct method was to deduct the tax payable by the firm from the total income of the in the first instance and only the balance so ascertained would be the amount that had to be apportioned between the partners entitled to receive the same is correct and is justified by a combined reading of s. 67(1)(a) and the proviso to s. 187(1). The actual amount allocated as profits assessable in the hands of the partners, though ascertained by the ITO by deducting the proportionate tax payable by the firm in respect of the two periods, has been upheld by the Tribunal as the result would not make any difference if the tax payable had been deducted from the total income in the first instance and thereafter the apportionment had been made. In this view, the answer to the question must be in the affirmative and is answered accordingly.