TMI Blog2018 (4) TMI 252X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to the firm or the individual in view of the recitals in the sale deed is devoid of merit. The notices u/s 148 of the Act were wrongly given as the reasons recorded were against the fact that, the asset belong to the firm which were in the knowledge of the A.O. No infirmity in the order of the First Appellate Authority wherein he held that u/s 189 of the Act, the assessments have to be made on the firm only, even if the business of the firm is discontinued. He rightly held that the capital gain in question could be brought to tax u/s 189 of the Act only in the hands of the seller firm with PAN AADFH 9221R. - Decided against revenue. - ITA No.2334/Kol/2017, C.O.No.24/Kol/201, ITA No.2335/Kol/2017 And ITA No.2336/Kol/2017 - - - Dated:- 28-3-2018 - Shri J.Sudhakar Reddy, AM For The Department : Shri Robin Choudhury, Addl. CIT For The Assessee : Shri A.K.Sarkar, FCA ORDER PER J.SUDHAKAR REDDY, AM: All these appeals are filed by the revenue directed against the orders of the Commissioner of Income Tax-(A)-7, Kolkata relating to A.Y. 2009-10. While the Cross Objection is filed in ITA No..2334/Kol/2017 by the assessee Shri Sabyasachi Pradhan. As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment proceedings, the appellant was asked to clarify the chargeability of capital gains for sale of the impugned immovable property as per the AIR information and the appellant clarified that he had not sold the property rather the seller firm of which he is a partner had sold such properties. Such assessment u/s. 143(3) was completed on 29.11.2011. Having received such information during the assessment proceedings of the appellant as well as from the AIR information for property transaction with respect to sale of property, the AO had issued notice u/s. 148 of the Act on 31.01.2012 to the appellant as well as on his co-partners of the partnership firm alleging that such capital gains on sale of the immovable properties has escaped assessment within the meaning of s. 147 of the Act. However, the appellant did not respond. The AO had conceived that the impugned capital gains on account of sale of the immovable properties of the seller firm, M/s. Hotel Sea Weed (PAN: AADFH9221R) was payable by the appellant in his individual capacity as a representative thereof. On such basis, the AO conceived that since the appellant along with his co- partners had executed the Sale Deed for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by made a gain of ₹ 1,23,05,770/- as per the provision u/s 50 of the I. T. Act, 1961 as per above discussion. Therefore, in absence of any defined sharing agreement, one-third of the same calculated to ₹ 41,0l,923/- as gain made thereof is now being added as short term capital gain made to the income of the assessee. 3. The assessee carried the matter in appeal. The First Appellate Authority held that the AO had wrongly initiated proceedings u/s 147 of the Income Tax Act, 1961 (Act) for charging the impugned capital gains in the hands of the purchaser firm having PAN:AAFFH2335G and thereafter dropping this proceedings of assessing the said capital gain in the hands of the purchaser firm and thereafter wrongly initiated proceedings to assess the impugned capital gains in the hands of the assessee, in his individual capacity and not in the hands of the seller firm having PAN: AADFH 9221R. 4. He held that each assessee shall be assessed only in respect of this income and that a partnership firm is clearly a separate and distinct assessable entity, different from its individual partners and that income of the partnership firm has to be assessed in its hands only. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... easons recorded for issuing of notice, u/s 148 of the Act to the seller firm M/s. M/s. Hotel Sea Weed and submitted that, it was only during the course of scrutiny proceedings u/s 143(3) of the Act in the case of Shri Partha Sarathi Das for A.Y.2009-10, this information came to light. He also pointed out that the written down value (WDV) of the asset in the books of account of the assessee firm was taken into consideration while computing capital gains on sale of the asset. He relied on the order of the ld. CIT(A) and supported the same. 8. Heard rival contentions. On a careful consideration of the submissions, papers on record and case law cited, I hold as follows.:- The issue in this case is whether the house building property in question is the asset of the partnership firm M/s. Hotel Sea Weed with PAN AADFH 9221R the Seller Firm with the address Paschim Sadadharpur, Old Disha, Purba Medinipur, West Bengal- 721428 or whether it is the individual property of the assessees, who are respondents of these appeals. 9. The AO has recorded the following reasons while reopening the assessment of the purchaser firm M/s. Hotel Sea Weed with PAN AAFFH 2335 G with address at Hotel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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