TMI Blog2014 (1) TMI 1268X X X X Extracts X X X X X X X X Extracts X X X X ..... ll the time Ld. CIT(A) passed his order - Therefore in case in between sales tax refund amount is received by the partners, assessing officer will be free to proceed as per law – Decided in favour of Assessee. - ITA No. 2588 /Ahd/2010, ITA No. 2589/Ahd/2010, ITA No. 2590/Ahd/2010 - - - Dated:- 19-7-2013 - Sri D. K Tyagi And Shri A. K. Garodia,JJ. For the Petitioner : Sri J. P. Jargid, D. R. For the Respondent : Sri S. N. Soparkar, A.R. ORDER Per : D. K. Tyagi, Judicial Member:- These appeals have been filed by the asessees against the separate orders of Ld CIT(A) dated 18-06-2010. 2. Since the facts of these appeals are identical, they were heard together and are being disposed of by passing a consolidated order by taking the facts of ITA No. 2588/Ahd/2010. 3. The common ground taken by the assessees in these appeals except the figure read as under:- "1. The Ld. CIT(A) erred in holding that the gains arising u/s 41 (1) was taxable in the hands of the appellant firm though no amount was actually received or foregone by it. 2. The Ld. CIT(A) erred in holding that the deed of assignment was executed to transfer the right to receive the refund which is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hand, the facts are not similar as rightly pointed out by the learned DR. In this case, the assessments of the respective dissolved firms have been made in respect past assessment years to which the amount received relates to. The amounts in question are the refund relating to the assesses firms, which has been received by the firm M/s. Hemraj Trading Co. which is clearly evident from the refund voucher placed on record and not by the individual partners of the assesses (erstwhile firms) in terms of respective profit ratio. The said amount was also assessed in the hands of M/s. Hemraj Trading Co. arid matter went up to the Tribunal and the Tribunal observed that even after discontinuation or dissolution, the AO shall be authorized to proceed against the firm for bringing to tax the amount of refund or remission or liability relating to dissolved firms. The amount in question has been received by M/s. Hemraj Trading Co. It is not clear from the record whether the said amount, received by M/s. Hemraj Trading Co. has been given to the individual partners of erstwhile firms and if at all they have received such amount, then it certainly taxable in the hands of the respective partners o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not applicable in its case. The CIT(A) in the case of M/s. Hemraj Trading Co. had observed that the refund of sales tax was subsequently cancelled by sales tax revisionary authority and assignee was directed to return the refund along with the interest and that the said decision was challenged by the assignee and the matter was under litigation and on these facts the CIT(A) accepted the contention of the assignee that the remission of liability has not become final as per decision of Supreme Court in the case of Union of India vs J.K. Synthetics 199 ITR 14 and Bharat Iron and Steel 199 ITR 67 (Guj) and deleted the addition in the case of assignee. The said action and the logic was upheld by Hon'ble ITAT but it was observed by the Hon'ble ITAT that AO could revoke the provision of Section 189 r.w.s, 41(1) for bringing to tax the remission of liability in the case of assignor firms. In view thereof, the assessment of the appellant firm was reopened and the refund amount and other claims were taxed in its hands. The CIT(A) in the second round deleted the addition relying on the decision of Gujarat High Court in the case of Banyan Berry 222 ITR 831 holding that the amount received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chargeable in the hands of discontinued entity and the loss if any could be then set off. In the instant case, certainly, by deed of assignment the appellant has ceased to exist and in the absence of any loss any gains arising u/s. 41(1), would be fully taxable in its hand. 9. Further aggrieved, now the assessee is before us. 10. At the time of hearing learned counsel of the assessee at the outset submitted that lower authorities have erred in disregarding the directions of Hon'ble Tribunal in assessee's own case dated 20-12-2007 wherein assessing officer was directed to tax the amount of sales tax refund in the case of assessee-firm if the same was received by the partners of the assessee. It was further submitted by the assessee that despite the fact that assessing officer accepts the fact that the partners of the firm have not received this amount, he had gone ahead in taxing this amount in the hands of the assessee. Since assessing officer has not followed the direction of the Tribunal, the addition made by him and sustained by Ld. CIT(A) deserves to be deleted. Ld. DR on the other hand relied on the earlier decision of the Tribunal in the case of M/s Hemraj Trading Compan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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