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change of parters in a firm

This query is : Resolved 

Dear friends,
Please clarify the above problem,
One firm running with 3 partners on 10/09/2007 , 2 partners have with drawn their interest in the firm and additionally 2 partners have jonined the same firm. and after 10/10/2007 1 partner among the 3 has also withdrawn his interest , and the firm is taken care by the newly joined 2 partners.

Please clarify that,

The firm has not changed any PAN No & TIN number under (VAT) ,
Please clarify whether it amount to get new TIN or PAN No & clarify whether INPUT vat can be claimed in the new firm.

Your case will fall under the change in constitution of firm. The relevant section of the Income tax Act for assessment in a such acase is Section 187, which is reproduced as below.

187. (1) Where at the time of making an assessment under section 143 or section 144 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 making the assessment.

(2) For the purposes 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 :

[Provided that nothing contained in clause (a) shall apply to a case where the firm is dissolved on the death of any of its partners.]

Subject to other regular restrictions eligible Inpuit VAT Credit will be available. Please go through your state act regrding obligation of informing such changes to the authorities.

Since the name of the firm is constant & only the constitution has changed I agree with expert mr S Shrinivasaraghavan. In case of VAT you have to file form 101 (Maharashtra) to specify the change & file it within specified time.

See the drafting of the deed carefully .
If out of three two had retired first and then two had joined .......then at a particular point of time there will be one left only ........which means dissolution of firm.

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