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2018 (1) TMI 711 - AT - Income TaxReopening of assessment - Money addition - addition in firm’s hands - Taking right person - pre-existence of tangible material before forming reasons to believe of escapement - section 153C applicability instead reopening u/s 147 - Held that:- Section 153C(1) of the Act before its amendment by the Finance Act 2015 w.e.f. 01.06.2015 provided for its application only if any money, bullion, jewellery or other valuable article or thing or books of accounts or documents seized or requisition belonged or belonged to a third person other than the searched assessee. Learned counsel fails to indicate any such material which can be stated to be belonging to the firm assessee so as to invoke Section 153C. We reiterate that the said provision is a special one in the nature of a complete code in itself which is applicable only in the specified circumstances. We therefore hold that once the said special provision’s application is not attracted, the Assessing Officer herein had no other option but to set into motion the general provision u/s.148 of the Act after taking cognizance of Prajapatis’ statements binding the firm assessee as per the relevant provisions in partnership law. We thus reject the firm assessee’s first argument hereinabove. We find no reason to concur with the firm assessees’ second argument as well challenging correctness of the impugned protective assessments in light of the abovestated case law starting with G K Consultants (2014 (7) TMI 680 - ITAT DELHI) dealing with an instance wherein no substantive assessment had been finalized. We repeat that this is not the case before us as the Assessing Officer had indeed framed corresponding substantive assessments in partner assessees’ cases (supra) making the very on money additions. The said case law are accordingly distinguished. We accordingly hold that the impugned protective assessment would become substantive in case the Revenue looses its appeals in the above partners’ cases hereinbelow. Third argument that both the lower authorities’ action making the impugned addition in firm’s hands reduces partner assessees’ tax liability from 50% to 25% is also devoid of merits as the crucial test in such a case is to file the right assessee in whose hands such an income has to be assessed as per hon’ble apex court’s above referred judgment in Ch Atchaiah’s case (1995 (12) TMI 1 - SUPREME Court). We have already concluded that the said right person herein has to be the firm assessee only. We therefore decline Mr. Talati’s instant last argument as well - There is hardly any dispute that the relevant parcels of commercial as well as Lapkaman deals involve more than one co-owners. The said properties admittedly are co-owned without any demarcation of share in metes and bounds. None of the co-owners particularly in Lapkaman deals is sure as to where his corresponding share would be allotted. We therefore are of the view that it is humanly impossible in such cases that a single co-owner only collects all or a portion of the on money in question running into huge sums. We refer to Prajapatis’ search statements declaring ₹ 2crores on money as unaccounted income. The on money amount has been proportionately spread over in all these assessees’ cases. We accordingly quote reasonable preponderance of probability that the impugned on money has been proportionately received by all the co-owners to the extent of their respective shares. The assessee’s instant argument is therefore rejected. - Decided against assessee. Revive on money addition qua 50% share of the instant partner assessessee in Sahyog Plaza - Held that:- As we have already upheld the said addition in firm assessee’s case after concluding that the same has to be made in the said partnership firm’s hands u/s.184 of the Act. We therefore reject Revenue’s instant substantive ground.
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