TMI Blog1999 (4) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... peals filed by the Revenue and in relation to the assessment year 1990-91 in appeal filed by the assessee in the same set of facts and circumstances : "1. Whether, the Appellate Tribunal is right in law and on facts in confirming the order passed by the Commissioner of Income-tax (Appeals) directing the Assessing Officer to adopt the status of the assessee as that of a registered firm ? 2. Whether the Appellate Tribunal is right in law and on facts in directing the Assessing Officer to exclude the income of the sister concerns clubbed with the income of the assessee ? 3. Whether the Appellate Tribunal ought not to have appreciated that the assessee-firm was not genuine and was a ruse or device to avoid tax liability ?" The Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age of the proceedings, A search has been conducted on the premises owned by the family in which all the different businesses named above were being run. The Assessing Officer without deciding the application for registration of the firm under the Income-tax Act, without holding an enquiry and giving a finding as to the genuineness of the firm held that the dissolution of the association of persons was with a view to avoid the tax and considering the material before it primarily on the proximity of relationship between their partners/proprietors, and that different businesses were carried on in the same premises and paying the different rentals to the owner of the property who were also members of the family on the basis of commission on sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so assessed all the seven entities separately on protective measure on the basis of returns submitted by them. The Commissioner of Income-tax (Appeals) in the case where it found in favour of the assessee further directed to treat the protective assessments to be substantive assessments and set aside the assessment made in the status of association of persons by clubbing different interests of the members. The Tribunal by a common order decided all the appeals. After referring to the material placed before it and recording submissions made by the respective parties it found that the Assessing Officer had made no enquiry about the genuineness of the firm nor he has given any finding thereon in the order passed. It found that none of the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the dissolution of the old association of persons and constitution of the firm was for bona fide reasons. It also found that all the requisite formalities for getting the firm registered under the Income-tax Act have also been completed and duly complied with. It, therefore, reached the finding that the dissolution of the old association of persons and the constitution of the firm was for bona fide reasons and no scheming was involved with the object of evading tax. It thus found no merit in the reasoning given for adopting the status as an association of persons. A finding as to the existence of the firm as genuine and not as a device for the purpose of avoidance of tax or a part of a scheme, is purely a finding of fact and cannot be s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... antitative details as it was not practical for them to maintain the closing stock details, quantity and qualitywise, that all the entities independently existed prior to the constitution of the firm and were being so assessed ; the associated concerns had business dealings not only with the assessee-firm but with outside agencies ; there being no interlocking and interlacing of the funds, it refused to draw inferences of oneness merely on the basis of the fact that the respective proprietors of the different business entities were members of the same family, the business was being carried in the same premises and there were inter se trading activity as well, which was found to be reciprocated by consideration as per market value of the good ..... X X X X Extracts X X X X X X X X Extracts X X X X
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