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2017 (9) TMI 1227 - AT - Income TaxAddition on account of income from alleged sale of land - assessment in who's hand - to be taxed in the hands of partnership firm or successor company - AO did not accept the dissolution of partnership firm - The assessee claims that on dissolution of partnership firm, the land was passed on to M/s. Vascon Engineers Ltd. (the successor company) - Held that:- Departmental Representative for the Revenue has failed to controvert the documents filed by the assessee in this regard and in view of the said facts and circumstances and in view of the fact that certain portion of consideration not being paid to the assessee, it cannot be held that the possession was handed over and hence, the deal was completed in the hands of assessee on 07.05.2007 itself. We reject the claim of learned Departmental Representative for the Revenue in this regard. In any case, the Assessing Officer had not accepted the fact of dissolution of assessee firm and taxed the profits; but the learned Departmental Representative for the Revenue has tried to improve and stated that even if dissolution is there, but possession was handed over on 07.05.2007 and hence, taxable. We find no merit in both the stands As the taxes have been paid on the profits arising on sale of said land by M/s. Vascon Engineers Ltd. in the instant year itself at higher rates and no benefit has arisen to the said concern on this account. There is no merit in disturbing the same. Accordingly, we delete the addition made in the hands of assessee on account of sale of land at Hadapsar. Another aspect which has to be considered is the approach of Revenue Department, wherein the balance land was also developed. In case there is no dissolution of assessee’s firm, then the profit arising on the development of balance land should have been assessed in the hands of assessee. However, they have not been assessed in the hands of assessee. The said profits were declared by M/s. Vascon Engineers Ltd. and Mr. Atul Chordia in their joint venture agreement and have been so assessed. Because of inconsistency, we find no merit in the stand of Revenue and since due taxes have been paid on the transaction, the ratio laid down in CIT Vs. Excel Industries Ltd. and Mafatlal Industries P. Ltd. [2013 (10) TMI 324 - SUPREME COURT] is squarely applicable and we apply the same and delete the addition in the hands of assessee.
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