TMI Blog2016 (12) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... one each at Juhu(Mumbai), Pune and Ahmedabad. With effect from 31st March, 1990 two partners of the petitioner firm retired. By a deed of retirement dated 25th May, 1990 the two retiring partners were allotted the branch at Ahmedabad with all its assets and liabilities at book value as their share in the business and as more particularly set out in the petition. During the course of assessment proceedings for the assessment year 1991-92, it was found that with effect from 1st April, 1990 the petitioner firm was left with only three shops situated at Queen's Road, Juhu and Pune. The Assessing Officer held that the branch at Ahmedabad which came to be allotted to the aforesaid retiring partners amounted to a transfer inclusive of capital assets by the firm to the retiring partners and therefore the Assessing Officer required the petitioner firm to explain as to why the provisions of Section 45(4) of the Act ought not to be applied on the footing that the allotment of the said branch amounted to distribution of a capital asset by way of transfer thereof. 3. In the instant case the firm having been reconstituted, continued to carry on business at the two establishments in Mumba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal before us. Even otherwise Mr.C.V. Parekh and Mr.P.C. Parekh retired from the assessee firm with effect from close of the business hours on 31.3.1990. Assessee firm is carrying on the business of retail sale of sarees. The retail shops are normally closed around 8' clock. Thus, the business hours on 31.3.1990 closed at 8 pm on 31.3.1990 i.e. during the financial year 1989-90 relevant to assessment year 1990- 91. Therefore, the issue of capital gains, if any, on retirement of partners from the firm would not arise in the year under appeal i.e. assessment year 1991-92. In view of above, we find no justification to sustain the addition of ₹ 52,27,282/- made by the A.O. as capital gains in the year under consideration. The same is deleted. (Emphasis supplied) 6. In view of the aforesaid emphasized portion in paragraph 8, the impugned notice came to be issued. The impugned notice dated 21st July, 2003 stated that the Assistant Commissioner of Income Tax had reason to believe that income chargeable to tax for the Assessment Year 1990-91 had escaped assessment within meaning of Section 147 of the Act and he therefore proposed to reassess income for the said Assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lakh. In the present case the notice was beyond time by 8 years and 4 months from the end of the normal period of four years. He invited our attention to Section 150(1). Mr. Jhaveri submitted that in order to give any effect to a finding or direction contained in the order passed by the Tribunal under the Act, a notice under Section 148 may be given at any time and the time limit will not apply in cases which are contemplated under the aforesaid Section. Section 150(1) clearly provides that notice under Section 148 may be issued at any time for the purpose of making a reassessment in consequence of any finding or direction contained in an order passed by any authority in any proceeding under the Act either by way of appeal, reference or revision. It is the case of the petitioner that in the instant case the order of the Tribunal does not contain any 'finding' or 'direction' as contemplated in Section 150(1). 10. Inviting our attention to the order of the Tribunal Mr. Jhaveri referred to paragraph 8 wherein the Tribunal had arrived at a finding that there was no transfer, in the instant case, pertaining to the allotment of the branch at Ahmedabad to the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce the Tribunal had in effect held that the addition could have been made for the year A.Y. 1990-91. 13. During the course of submissions by counsel, we had enquired of Mr. Suresh Kumar as to whether the sanction which had been sought and as contemplated in the reasons had in fact be obtained. Mr. Suresh Kumar had at that stage filed an additional affidavit dated 23rd August, 2016 of one Neerja Sharma annexing thereto a copy of the sanction dated 18th July, 2003. Perusal of the sanction reveals that on 18th July, 2003 satisfaction was recorded by the Commissioner of Income Tax in the following words:- Yes I am satisfied in view of the provisions of Section 150 read with Explanation 2 below Section 153(3). 14. The reference made in the said sanction was not only to Section 150 but Section 150 read with explanation (2) to Section 153(3) which provides as follows:- Where, by an order referred to in clause (ii) of sub- section (3) any income is excluded from the total income of the assessee for an assessment year, then, an assessment of such income for another assessment year shall, for the purposes of section 150 and this section, be deemed to be one made in cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se in Murlidhar Bhagwan Das (supra) are very akin in the facts of the present case as well. Moreover, in paragraph 11 of Lotus Investments (supra) the Court had occasion to deal with the effect of Section 150(1) read with Explanation 2 of Section 153 and has observed that Assessing Officer was free to look into and consider the disallowances under Section 148 of the Act for the relevant assessment years in terms of provisions of Section 150(1) read with Explanation 2 of Section 153 of the Act. 18. Mr. Jhaveri also pointed out that in respect of assessment year1991-92 the revenue had filed Income Tax Appeal bearing (L) No.552 of 2003 pursuant to the order passed by the Tribunal on 7.6.2001. However, said appeal stood rejected on account of this Court having declined to condone delay of 302 days in filing that appeal. Mr. Jhaveri relied upon a copy of the said Inc ome Tax Appeal (L) No.552 of 2003 and the order dated 26th February, 2007 passed by this Court in Notice of Motion No.1635 of 2003 in Income Tax Appeal (L) No.552 of 200 3 declining to condone the delay. Even otherwise it is seen that the revenue's appeal seeking to challenge the order of the Tribunal dated 7th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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