TMI Blog2018 (5) TMI 852X X X X Extracts X X X X X X X X Extracts X X X X ..... once again in the hands of the partner. However, in the same vein, we find that question as to whether the undisclosed income in controversy, forms part of the additional income declared before the Settlement Commission or not, is essentially a question of fact. This aspect has not been raised before the lower authorities, and thus remained unanswered. Hence, as a measure of fair-play, the issue requires to be remanded back and restored to the file of CIT(A) to re-appreciate the limited aspect as to whether income in dispute has already been included in the additional income offered by the partnership firm before the Settlement Commission, directly or indirectly. - ITA No. 3447/Ahd/2016, ITA No. 3450/Ahd/2016, ITA No. 3449/Ahd/2016 And IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case of Savvy group including partnership firm - Savvy Infrastructure Co. In the course of search and survey proceedings in the case of Savvy group, certain incriminating material were stated to be found and impounded. The said incriminating material contained working related to M/s.Savvy Serene Projects being developed under the partnership firm M/s.Savvy Infrastructure Co. As per the partnership deed, the captioned assessees in the present appeals hold certain percentage of shares of profit in the said partnership firm. Incriminating materials were confronted the partner, Shri Mahesh Shantilal Patel (assessee herein) on 29.7.2011. A statement was recorded under section 131 of the Act. In course of reply in 131-proceedings, the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al before the CIT(A). 8. The CIT(A) revisited the facts and also noted various plea raised on behalf of the assessees, but however, did not find merit therein. The CIT(A) refused to pay heed to the contentions of the assessee that share of unaccounted profits of the firm cannot be added as undisclosed income of the assessee. Plea of the assessee that share of undisclosed income of the firm (Rs.9,75,000) was not liable to be taxed in the hands of the assessee in its capacity of a partner, was not found sustainable. 9. The CIT(A) inter alia noted that where the partnership firm has not offered the undisclosed income for taxation as admitted, the same is required to be added in the hands of partners including the assessee herein. The C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The ld.DR, on the other hand, vociferously opposed the plea raised on behalf of the assessee and supported the order of the CIT(A). The ld.DR submitted that it is not evident that the aforesaid amount forms part of undisclosed income offered by the partnership firm before the Settlement Commission or not and the onus is on the assessee to demonstrate the disclosure purportedly made. 14. We have carefully considered rivals submissions and perused the orders of the authorities below. The taxability of undisclosed income detected in the course of search in the case of partnership firm where the assessee is a partner is in question. We shall first take a look into the second proposition raised on behalf of the assessee. On behalf of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds of the partnership firm. 15. We shall now advert to the first proposition raised on behalf of the assessee that the income can be taxed only in the hands of the partnership firm. It is true that income is required to be taxed in the hands of right person only. However, we also bear in mind that the partnership firm is only a creature of agreement and partners are intrinsically connected contractually under the Partnership Act. Partners (assessees herein) hold mutual agency on behalf of the firm and are liable and responsible for the acts of the assesseefirm. A firm is merely a compendious expression for its partners. This apart, the undisclosed income of the partnership firm ultimately goes to the partners by way of share of their und ..... X X X X Extracts X X X X X X X X Extracts X X X X
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