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2019 (9) TMI 1173 - AT - Income TaxAssessee firm converted into Private Limited Company - Addition on account of Sales Tax refund - Status of the assessee is “Firm” - HELD THAT:- Assessee, admitted during the course of arguments that in assessment year under appeal in which sales tax refund have been received by the assessee firm, assessee firm continued its activities and exist. This fact is also corroborated by the fact that assessee firm has filed the return of income for assessment year under appeal on 20.09.2011 declaring income at ₹ 26,04,046/-. It would mean assessee firm exist in assessment year in appeal. It is not in dispute that the contract had been awarded to the assessee firm on which sales tax had been deducted by the deductee at the time of payment of contract receipts to the assessee. Therefore, refund of sales tax shall have to be taxed in the hands of the assessee firm only. Since the assessee firm exist in assessment year under appeal and also declared business income in assessment year under appeal, there was no reason to show the impugned amount as income of Private Limited Company. It is well settled Law that income is to be taxed in the hands of person liable for taxation. Income is to be assessed in the hands of right person, even if wrong person paid tax. We rely on Judgment of Hon’ble Supreme Court in the case of Ch. Atchaiah’s case [1995 (12) TMI 1 - SUPREME COURT] - Decided against assessee.
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