Judgment :- K. A. THANIKKACHALAM J. At the instance of the Department, the Tribunal referred the following two questions, for the opinion of this court, under section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as the "Act") "1. Whether, on the facts and in the circumstances of the case, and having regard to the provisions of section 187(2) of the Income-tax Act, 1961, the Appellate Tribunal was right in holding that two separate assessments should be made, one for the period April 1, 1974, to January 31, 1975, and another for the period from February 1, 1975 to March 31, 1975, for the assessment year 1975-76 in the assessee's case ? 2. Whether the Appellate Tribunal's view that there was only a succession under section 188 of the Income-tax Act and not a change in the constitution of the firm within the meaning of section 187(2) of the Income-tax Act, 1961, is sustainable in law ?" * The assessee is a registered firm, carrying on business in paper, board, etc. On April 1, 1974, the firm consisted of four partners, while fifteen new partners were inducted into the firm by reconstitution of the firm on December 1, 1974. The firm, therefore, contained 19 partners from that date. There was a deed of dissolution executed on January 31, 1975, recording an agreement to dissolve the firm from that date. The accounts were also closed on the same date and the profits up to that date ascertained and divided in accordance with the profit-sharing ratio as per the deed. A new firm came into existence with effect from February 1, 1975, consisting of fifteen partners from the erstwhile firm and three new persons. The inter se relationship between such fifteen persons also underwent modification. The Inspecting Assistant Commissioner sought to club the income arising to the firm of eighteen partners for the period February 1, 1975, to March 31, 1975, as arising to the same assessee. He was of the opinion that in view of the common partners, section 187(2) of the Act, authorised him to make a single assessment, rejecting the assessee's case that separate assessments should be made for the two different periods, since there was dissolution of the earlier partnership firmAggrieved, the assessee filed an appeal before the Commissioner of Income-tax (Appeals). He was of the opinion that in view of the common partners, section 187(2) of the Act, authorised him to make a single assessment, rejecting the assessee's case that separate assessments should be made for the two different periods, since there was dissolution of the earlier partnership firmAggrieved, the assessee filed an appeal before the Commissioner of Income-tax (Appeals). According to the assessee, after the dissolution on January 31, 1975, the erstwhile firm was dissolved and by a new deed of partnership, dated February 1, 1975, a new partnership came into existence. Therefore, two assessments should be made, one in the name of the erstwhile firm and another in the name of the new firm, constituted under the partnership deed, dated February 1, 1975. However, the Department was of the view that there was no dissolution, but there was only continuation of the old firm, and, therefore, two assessments are not possible. However, the Commissioner of Income-tax (Appeals) accepted the view taken by the Inspecting Assistant Commissioner, and held that only one assessment should be made for both the periods. The Commissioner of Income-tax (Appeals), followed the decision of the Andhra Pradesh High Court in Addl. CIT v. Visakha Flour Mills 1977 (108) ITR 466[FB]. Aggrieved, an appeal was filed before the Appellate Tribunal. The Appellate Tribunal pointed out that inasmuch as there was dissolution of the erstwhile firm under a deed of dissolution, dated January 31, 1975, two assessments should be made for the two periods. The Tribunal also pointed out that the decision in Addl. CIT v. Visakha Flour Mills 1977 (108) ITR 466 AP) [FB] was overruled by the Full Bench of the same High Court in Addl. CIT v. Vinayaka Cinema 1977 (110) ITR 468, 1978 AIR(AP) 51 (AP) [FB] in Mavukkarai (N.) Estate Tea Factory v. Addl. CIT 1978 (112) ITR 715, 1988 (112) ITR 715, 1978 (7) CTR 225, 1978 CTR(Mad) 225 Accordingly, the Tribunal held that one assessment should be made up to January 31, 1975, excluding the income arising after February 1, 1975Before us, learned standing counsel appearing for the Department, submitted that the Tribunal was not correct in directing to make one assessment up to the period January 31, 1975. According to learned standing counsel, even in the fresh partnership deed dated February 1, 1975, it was stated that four of the partners of the erstwhile firm retired from the partnership and fifteen partners out of the erstwhile firm along with three other persons constituted a new firm and they are doing the business done by the erstwhile firm. Therefore, according to learned standing counsel, there is continuation of the old firm and there should be one assessment. On the other hand, learned counsel appearing for the assessee, while supporting the order passed by the Tribunal, submitted that inasmuch as there was a deed of dissolution, dated January 31, 1975, dissolving the erstwhile firm, it cannot be said that the erstwhile firm is continuing Even though four of the partners of the erstwhile firm expressed their desire to retire from the partnership firm and in pursuance of that, all the partners in the erstwhile firm decided to dissolve the firm and accordingly a deed of dissolution was drawn up. It was therefore stated that after the dissolution, it cannot be said that the erstwhile firm is continuing. We have heard the rival submissions. The facts on record would go to show that on April 1, 1974, the firm consisted of four partners, while fifteen new partners were included in the new firm by reconstitution of the firm on December 1, 1974. Thereafter, the firm consisted of nineteen partners. There was a deed of dissolution, dated January 31, 1975, recording an agreement to dissolve the firm from that date. Four of the partners expressed their willingness to retire from the partnership. In pursuance of that, all the partners agreed to dissolve the firm. Accordingly, a deed of dissolution, on January 31, 1975, was executed when the firm was dissolved. The respective shares belonging to the partners in accordance with the profit-sharing ratio were also distributed. Various other authorities were also informed with regard to the dissolution of the firm. A new firm came into existence under a partnership deed, dated February 1, 1975. The fifteen persons, who are partners in the old firm, along with three other persons constituted the new firm. Therefore, on the facts, it was established that the erstwhile firm constituted under the partnership deeds dated April 1, 1974 and December 1, 1974, was dissolved on January 31, 1975. The fifteen persons, who are partners in the old firm, along with three other persons constituted the new firm. Therefore, on the facts, it was established that the erstwhile firm constituted under the partnership deeds dated April 1, 1974 and December 1, 1974, was dissolved on January 31, 1975. Hence, it cannot be said that the erstwhile firm continues even after the fresh deed of partnership was executed on February 1, 1975. In CIT v. Meenakshi Bankers 1985 (152) ITR 132, 1984 (41) CTR 219, 1984 (18) TAXMAN 88 (Mad), this court, following the decision of the Andhra Pradesh High Court in CIT (Addl.) v. Vinayaka Cinema 1977 (110) ITR 468, 1978 AIR(AP) 51[FB], held that in a matter like this, it cannot be said that the erstwhile firm continues while there was a deed of dissolution, dissolving the erstwhile firm. To the same effect, there is a decision of the Supreme Court in Wazid Ali Abid Ali v. CIT 1988 AIR(SC) 757, 1988 (169) ITR 761, 1987 (4) JT 349 , 1987 (2) Scale 1078 , 1988 (S) SCC 193, 1988 (1) SCR 917 , 1988 (67) CTR 43, 1987 (35) TAXMAN 180, 1988 TaxLR 844, 1988 SSCC 193, 1988 (67) CTR(SC) 43. On similar facts, the Supreme Court in CIT v. Amritlal Nihalchand 1992 (196) ITR 346, 1992 (106) CTR 369 held that there is no succession while there was a deed of dissolution and clubbing of the income of the two periods was wrong. According to learned standing counsel appearing for the Department, there is no notice by the partners prior to dissolution as per the provisions of section 43 of the Partnership Act. But inasmuch as in the present case all the partners decided to dissolve the firm and in pursuance of that, a dissolution deed was drawn up on January 31, 1975, as per the provisions contained in section 40 of the Partnership Act, no notice under section 43 of the Partnership Act is necessary. Accordingly, we hold that there is no infirmity in the order passed by the Tribunal in directing to make one assessment till January 31, 1975, in the name of the erstwhile firm and another for the period February 1, 1975 to March 31, 1975, in the name of the new firm. Accordingly, we answer the questions referred to us in the affirmative and against the Department. No costs.