Case Law Details
Delhi High Court held In the case of Arun Khanna vs. The ICAI & ANR that the notice issued to the ICAI for demerger of the firms was as per the notified rules in this regard. As per these rules it is clear that no concurrence / acceptance from all partners is required and can be effected at the option of 75% or more partners of one of the erstwhile firms. Here, all the partners of one of the two merging firms opted to demerge. Upon such demerger, the other merging firm viz. Arun Khanna & Associates stood revived.
Facts of the Case
The assessee is a practising Chartered Accountant and was working in the name and style of M/s Arun Khanna & Associates. w.e.f. 14th October, 2013, he merged his firm with another firm named M/s Sawhney Verma & Co. having six partners and intimation of the same was given to the ICAI in accordance with Rules of Merger and De-merger of the institiute. A Partnership Deed dated 14th October, 2013 was also executed between the parties that under the said merger, M/s Arun Khanna & Associates ceased to exist and merged with M/s Sawhney Verma & Co. and of which the petitioner besides its six original partners, became partners.
Later on the assessee on 7th July, 2015 and 13th July, 2015 gave notices to all the banks for freezing thereof, owing to the dispute which had arisen between them. The original partners of M/s Sawhney Verma & Co. gave notice dated 20th / 22nd July, 2015 of meeting of all the partners of the firms for resolution of the disputes and it was held that though the original partners of M/s Sawhney Verma & Co. had so admitted the assessee to be a partner till 20th July, 2015 but on 24th July, 2015 gave a notice to the ICAI of de-merger w.e.f. 1st July, 2015 of M/s Arun Khanna Associates from M/s Sawhney Verma & Co. This notice was confirmed by the ICAI vide letter dated 10th August, 2015 by stating that de-merger meets the rules of merger / de-merger and satisfies the criteria laid down by the Council.
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