9911796707
TMI Blog2023 (5) TMI 1007X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Income Tax Act, 1961 (hereinafter referred to as "the Act"), dated 29.12.2018. 2. Grounds of appeal raised by the Revenue are as follows: "(1) On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in deleting the addition of Rs.74,06,250/- made by the Assessing Officer on account of unaccounted income derived from the partnership firm M/s. Platinum Developers by observing that the income including undisclosed income, if any, has to be brought to tax in the hands of the said firm only ignoring the fact that the share of profit derived from the partnership firm is exempt from taxation in the case of the partners only when the partnership firm has paid taxes on such income before distribution of the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred in deleting the addition of Rs.74,06,250/- made by the Assessing Officer on account of unaccounted income earned from the partnership firm M/s. Platinum Developers by considering the submission that the said partnership firm has filed an application for settlement before the Hon'ble Settlement Commission, Mumbai in which the undisclosed income, as apparent from the seized material, has been offered for taxation in the hands of the firm, without appreciating the fact that the Hon'ble Settlement Commission has not yet passed any final order in the case of the partnership firm and the matter is still pending for consideration. (5) In addition to and without to prejudice to Grounds No. 1 to 4, on the facts and in the circumstanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mend and/or withdraw any ground(s) of appeal either before or during the course of hearing of the appeal." 3. Succinct facts are that assessee is engaged in the Proprietary business of trading of embroidery machines in the name of Pearl Overseas and also partner in the firm of M/s Akshar Associates, Hariom Corporation and Platinum Developers. According to the assessing officer, during the course of search in the premises of K-Star Group at Katargam, Surat some incriminating documents marked as Annexure A-485 page Nos.76-79 were found and seized. They were relating to Project Himgiri developed by the assessee and three other partners namely Mr. Kishore Koshiya, Mr. Bharat Gadhiya and Mr. Vishrambhai. The said papers are reproduced by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (seized by the Department) reveals that an amount of Rs.2,96,25,000/- has been divided between the partners up to 15.04.2016. During the assessment stage, the assessee was requested to produce relevant ledger/books of account showing the transaction, however assessee did not produce them before assessing officer. As per page no.79, a 'partner divided' amount of Rs.2,96,25,000/- is appearing on this page. The word 'partner divided' as mentioned in the document on page no.79 means the profit from the project which needs to be divided amongst the partners of the firm. In normal course the share of profit is exempt from tax when the taxes are paid by the firm. Here it is clear that the unaccounted income on which taxes has not been paid by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;Himgiri' as carried out by M/s Platinum Developers, a partnership firm, is duly covered in the petition filed by the said firm viz. M/s Platinum Developers before the Hon'ble Settlement Commission u/s 245C of the Act. Before the Settlement Commission M/s Platinum Developers has disclosed additional income taking into consideration the seized records on the basis of which the assessing officer has made the alleged addition in case of the assessee. As the seized papers under reference belongs to M/s Platinum Developers and income as per the same has been declared before the Settlement Commission on which due tax plus interest is paid by the assessee and the final order has also been pronounced by the Settlement Commission u/s 245D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;ble Settlement Commission, Mumbai in which the undisclosed income which is part of the seized material referred to above has been offered to tax in the hands of the said firm. Therefore, ld CIT(A) held that the "Himgiri Project" belonged to M/s Platinum Developer and income including undisclosed income, if any, has to be brought to tax in the hands of the said firm only. The income of the firm especially when assessed to tax cannot be brought to tax in the hands of the individual partners. Therefore, the addition made by the assessing officer towards the income of the partnership firm M/s Platinum Developers in the hands of the assessee in the profit sharing ratio cannot be sustained. Accordingly, the addition of Rs.74,06,250/- made by t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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