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2014 (10) TMI 217 - AT - Income TaxAssociation of persons (AO) or co-ownership – Whether confirming assessment in the hands of co-ownership would amount to double taxation of same income - AO was of the view that the return of income was filed merely to indicate the amount of income to be computed of collective co-ownership to determine allocable income amongst respective co-owners/members wherein the shares of all members of AOP were definite and determinate and the income from property earned by all joint co-owners was to be taxed mandatorily in the hands of respective co-owners as per provisions of section 26 of the I.T. Act - Held that:- The FAA and the role played by the Tax Consultants while advising the assessees - while applying for PAN Card it is duty of the assessee to tick the status in which the assessee is likely to be assessed and if there is any dispute the same has to be brought to the notice of the AO - these two assessees filed Form No. 49A in the name of “Ritesh Ramesh Shah & Others” and “Praful Ramesh Shah & Others” which would clearly indicate that they are not claiming the status as ‘individual’ - There cannot be any doubt that the assessees would have taken sufficient care to apply for PAN Card through some Tax Consultants but still the applications are made specifically in the name of “and Others” but in the status of ‘individual’. Each of them has a specific share in the property - It is not known as to what is the common action taken by all of them together - There cannot be any dispute that if income is earned by virtue of joint action, it has to be assessed as ‘Association of Persons’ and not in the hands of each co-owner - the AO has to take proper care and analyse the facts of each case and on examination he should have recorded an appropriate finding as to whether the share of each individual is determinate and whether it is assessable as AOP or in the hands of each individual under section 26 of the Act - It also needs verification as to how the refund is granted to the individual with the same PAN Card when the PAN card is issued in the name of ‘Firm’ - It is intriguing that from year to year not only proceedings were completed under section 143(1) but also under 143(3)/CIT(A) but this aspect was not examined – thus, the order of the CIT(A) is to be set aside and the matter is remitted back to the AO for fresh adjudication – Decided partly in favour of assessee.
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