JUDGMENT

Y: K. SABHARWAL, J.- At the instance of the Revenue the question, in respect of the assessment year 1984-85; that was referred for the opinion of the High Court was (see (2000) 242 ITR 468, 469):"Whether on the facts and in the circumstances of the case where on the dissolution of the firm the business is taken over by a partner without discontinuance and the value of the closing stock determined under the regular method of accounting is accepted by the partners in the settlement 'of accounts for dissolution purposes, the Income-tax Officer can substitute the market value in respect of' the closing stock alone for the purpose of determining the income of the firm up to the date of dissolution?".Briefly, the facts are as followsThe assessee is a registered firm. As a result of the death of one out of its six partners, on February 6, 1984, the firm was dissolved. It was, however, reconstituted with effect from the next day, that is, February 7, 1984 with the remaining five partners. Two ...