THE COMMISSIONER OF INCOME-TAX, CENTRAL-I, BOMBAY vs MESSRS. EMPIRE ESTATE, BOMBAY

The Supreme Court addressed a conflict among High Courts regarding the interpretation of Section 187 of the Income Tax Act, 1961, specifically whether the dissolution of a partnership due to the death of a partner constitutes a 'change in the constitution of the firm.' The Court held that the partnership was dissolved upon the death of Mrs. Ellen Modi, and thus, two separate assessments were warranted for the periods before and after her death, as the case fell under Section 188 rather than Section 187. The Tribunal's decision to direct two assessments was upheld.