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2021 (8) TMI 1312 - ITAT INDOREUndisclosed investment u/s 69 in purchase of land properties - profit arising on sale of land by the firm required to be taxed in the hands of the firm OR in the hands of the partner - Assessee filed applications before the ITSC for settlement of his case in the first round of litigation - HELD THAT:- We find that the addition made by the Assessing Officer is contrary to the findings and the decision of the ITSC in the assessees’ own cases as the ITSC, while dealing with the application of the assessees has discussed the facts and after considering the report of the PCIT under rule 9, has also rendered a categorical finding stating that “we have no doubt in our mind that both the unaccounted investment in land purchased by the firm M/s RNR Devcon as well as the profit arising on sale of land by the firm are required to be taxed in the hands of the firm. The receipts of the applicants (accounted as well as unaccounted) in lieu of forgoing their partnership share to Kakwani family would be capital receipts and not revenue receipts.” Therefore, even as per the categorical findings of the ITSC in the assessees’ own cases, the alleged unaccounted investment could not have been taxed in the hands of the present assessee. These observations of the ITSC have been accepted by the PCIT/Assessing Officer in so far as the order of ITSC has not been challenged. The Assessing Officer failed to bring any evidence suggesting that the alleged on-money for purchase of the land was paid by the assessees out of their personal resources. There is no reference of any enquiry having been conducted from the firm. Thus, the addition has been made only on surmises and conjectures. Thus, we have no doubt in our mind that the investment in land purchase by the said firm as well as the profit arising on sale of land by the firm is required to be taxed in the hands of the firm and not in the hands of the partner i.e. present assessees. - Decided against revenue.
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