Concord Chemicals, Mumbai vs Department Of Income Tax
- CitationI.T.A. No.4735/Mum/2011
Ratio decidendi
The rule this decision rests on
The reasoning in this order rests on the following points, in the order the Tribunal takes them: Where the assessee's business was carried on as a proprietary concern for a part of the year and the partnership firm was constituted only from a later date, the income for the period prior to the constitution of the firm cannot be assessed in the hands of the firm; it falls to be assessed separately in the hands of the person carrying on the business during that period, and the Assessing Officer is to frame separate assessments accordingly, in line with the provisions of section 170(1) of the Act. An Assessing Officer's assessment of unexplained cash deposits under section 68 cannot stand in the hands of a successor firm for a period during which the business was not carried on by that firm, and an appellate authority that re-allocates such income to the correct assessee in accordance with section 170(1) does not thereby err in law.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
BEFORE HON'BLE S/SHRI H.L. KARWA, PRESIDENT AND B.R.BASKARAN (AM) सव ी एच.एल. कावा, अ य एवं बी.आर.बा करन, लेखा सद य आयकर अपील सं./I.T.A. No.4735/Mum/2011 ( नधारण वष / Assessment Year :2007-08)
Income Tax Officer 12(1)1), बनाम/ Concord Chemicals, Room No.115, Vs. 28 Esplande Bldg, 3rd floor, Aayakar Bhavan, Above Vithal Bhepari, M.K.Road, Fort, Mumbai-400020 Mumbai-400001 (अपीलाथ /Appellant) .. ( यथ / Respondent)
थायी ले ख ा सं . /जीआइआर सं . /PAN/GIRNo. :AAAFC3155M
अपीलाथ ओर से / Appellant by : Shri Premanand J यथ क ओर से/Respondent by None
सन ु वाई क तार ख / Date of Hearing :29.12.2014 घोषणा क तार ख /Date of Pronouncement : 16.01.2015
आदे श / O R D E R
Per B.R.BASKARAN, Accountant Member:
The revenue has filed this appeal challenging the order 18-03-2011 passed by Ld CIT(A)-23, Mumbai and it relates to the assessment year 2007-08. The revenue is aggrieved by the decision of Ld CIT(A) in deleting the assessment of unexplained cash deposits of Rs.21,43,060/- made u/s 68 of the Act.
2. None appeared on behalf of the assessee though the notice was served through the department by affixture. Hence we proceed to dispose of the appeal ex-parte, without the presence of the assessee.
4735/2011 2 3. We heard Ld D.R and perused the record. The assessee is a trader in chemicals, iron and steel and phar. We notice that the present assessment has been in the hands of the Partnership Firm. In the title also, the status of the assessee is mentioned as "Firm". However, in the body of assessment order, the assessing officer has noted that the assessee is a proprietary firm, which appears to be contradictory. The facts relating to the impugned addition are that, during the course of assessment proceedings, the AO noticed that the assessee has made cash deposits in his bank account to the tune of about 93.26 lakhs. The assessee did not furnish any details relating thereto. Hence the AO arrived at peak credit balance of Rs.21,43,060/- as on 17.08.2006 and assessed the same u/s 68 of the Act.
4. In the appellate proceedings, the assessee submitted that the partnership firm itself was formed from 1.1.2007 only consisting of Shri M.P.Hussaini and Shri Sanjay Y Adalja as partners. It was further submitted that the business was carried on as proprietary concern upto 31.12.2006 by Shri M.P. Hussaini. Accordingly he submitted that the peak credit balance as on 17-08-2006 relates to the prior period during which the business was run as proprietary concern. By placing reliance on the provisions of sec. 170(1), it was submitted that the income for the period from 1.4.2006 to 31.12.2006 could not be assessed in the hands of the partnership firm. The Ld CIT(A) accepted the contentions of the assessee and accordingly directed the assessing officer to frame separate assessment, viz., in the hands of Shri M.P. Hussaini for the income generated during 1.4.2006 to 31.12.2006 and in the hands of the present assessee for the period from 1.1.2007 to 31.3.2007.
5. At the time of hearing, though the Ld D.R challenged the order of Ld CIT(A), yet he could not point out any infirmity in the order of Ld CIT(A).
4735/2011 3 We also notice that the Ld CIT(A) has issued directions in terms of sec. 170(1) of the Act. Hence, we do not find any reason to interfere with his order.
6. In the result, the appeal filed by the revenue is dismissed.
The above order was pronounced in the open court on 16th Jan,2015.
घोषणा खुले यायालय म दनांकः 16 th Jan 2015 को क गई ।
sd sd
(एच.एल. कावा/ H.L. KARWA) (बी.आर. बा करन,/ B.R. BASKARAN) अ य / PRESIDENT लेखा सद य/Accountant Member मब ुं ई Mumbai: th Jan, 2015.
व. न.स./ SRL , Sr. PS
आदे श क त ल प अ े षत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent.
3. आयकर आयु त(अपील) / The CIT(A)- concerned
4. आयकर आयु त / CIT concerned
5. वभागीय त न ध, आयकर अपील य अ धकरण, मब ंु ई / DR, ITAT, Mumbai concerned
6. गाड फाईल / Guard file.
आदे शानस ु ार/ BY ORDER, true copy सहायक पंजीकार (Asstt. Registrar) आयकर अपील य अ धकरण, मुंबई /ITAT, Mumbai
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