TMI Blog2023 (5) TMI 1007X X X X Extracts X X X X X X X X Extracts X X X X ..... ai 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. 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. Addition made by the AO 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. Appeal filed by the Revenue is dismissed. - ITA No.283/SRT/2022 - - - Dated:- 23-5-2023 - Shri Pawan Singh, JM And Dr. A. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 partnership firm has offered only 20% of Rs.5,30,00,000/- (sales of Rs.4,93,57,292/- and some other expected sales of Rs.29,66,250/- totaling to Rs.5,23,23,542/-) as profit for taxation and not disclosed the amount of Rs.2,96,25,000/- 'Partner divided', appearing in the document in question. (3) On the facts and in the circumstances of the case and in law, the Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed from partners and hence the balance net amount of Rs.2,96,25,000/- shown as Partners Divided were inclusive of the unaccounted investment of Rs.2,56,20,000/- made by the partners and hence, the addition the extent of Rs.64,12,500/- (25% share of the assessee of Rs.2,56,50,000/-) in the hands of assessee was clearly sustainable, being unaccounted contribution to the firm by the assessee. (6) On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has not appreciated the fact that in case, the incriminating document was pertaining to the partnership firm as claimed by the assessee, the entries on the receipt side of the said documents was showing Rs.2,56,50,000/- being the amount received from partners and henc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.2016. The paper showed that the amount of Rs.2,96,25,000/- was the 'partner divide' which was held to be the profit from the project of the firm to be divided amongst the partners of the firm. The assessing officer further held that the share of profit from the firm is exempt in the hands of the partners if the taxes are paid in the hands of the firm. But in the instant case, the income being unaccounted and the taxes are not paid by the firm, the income has to be brought to tax in the individual hands of the partners. Therefore, assessing officer made addition of Rs.74,06,250/- in the hands of the assessee. 4. Aggrieved by the order of Assessing Officer, the assessee carried the matter in appeal before the Ld. CIT(A), who has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... On the other hand, Ld. Counsel for the assessee pleaded that seized page no. 79 of Annexure A-485 is in relation, to the project 'Himgiri' carried out by the partnership firm M/s Platinum Developers, wherein assessee is a partner. Thus, it gets clear that the assessee has not carried out the said project in his individual capacity but the same is carried out by his partnership firm, M/s Platinum Developers which, is separately assessed to tax and hence, there is no question of the assessee earning any unaccounted income for the same in his individual capacity and even the seized document does not show any income received by the assessee for the same. Further, the learned assessing officer has also erroneously treated the 'partne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y be upheld. 8. We have heard both the parties and carefully gone through the submissions put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the facts of the case including the findings of the ld. CIT(A) and other material brought on record. The ld CIT(A) observed that project Himgiri is the project executed by M/s Platinum Developers, a partnership firm in which the assessee is the partner alongwith Mr Kishore Koshiya, Mr Bharat Gadhiya and Mr Vishrambhai. All the four partner's are having equal share of profit and hence, the assessee has 25% share in the said firm. The said firm has been assessed to tax from the period prior to the date of Search, and was assessed to ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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