TMI Blog2023 (9) TMI 841X X X X Extracts X X X X X X X X Extracts X X X X ..... ment proceedings? - HELD THAT:- Tribunal has, rightly, sustained the view of the CIT(A). A perusal of the proposed question of law would show that the appellant/revenue has instituted these appeals to agitate that aspect of the matter which relates to the validity of triggering reassessment proceedings, because some of the issues and additions involved were common to the block assessment proceedings as well as the reassessment proceedings. Thus, according to us, on merits, the impugned order needs no interference. The appeals are accordingly closed, with the caveat that the question of law raised by the appellant/revenue is left open. - HON'BLE MR. JUSTICE RAJIV SHAKDHER AND HON'BLE MS. JUSTICE TARA VITASTA GANJU For the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sustained the order of the CIT(A) on merits, and also ruled in favour of the respondent/assessee on the question of law concerning the reopening of assessment under Section 147/148 of the Income Tax Act, 1961 [in short, Act ]. 8. For the purposes of adjudicating these appeals, the following broad facts are required to be noticed: 8.1 The respondent/assessee is a partnership firm which was, apparently, constituted on 02.07.1999. With the induction of a new partner, a fresh partnership deed was executed on 22.11.1999. The partnership firm, apparently, also carried out in the relevant period, retail business in garments. 9. The first year for closure of accounts of the respondent/assessee ended on 31.03.2000. Accordingly, the Return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commission on the declared purchase price, i.e., Rs. 2.25 crores. The commission was calculated at the rate of 2% and, thus, crystalized at Rs. 4,50,000/-. (iii) The reduction in the opening balance of outstanding loan, as appearing on 31.03.2000, which was a figure amounting to Rs. 25,00,000/-, to Rs. 21,00,000/-, as on 31.03.2001. According to the AO, the reduction in the loan amount, not having been explained was also a sufficient reason for triggering the reassessment proceedings. (iv) The introduction of unexplained capital amounting to Rs. 2.579 crores. 14. Insofar as the block assessment order dated 27.02.2004 was concerned, the respondent/assessee had preferred an appeal against it, which was disposed of by the CIT(A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s noticed right at the outset, both the appellant/revenue as well as the respondent/assessee preferred appeals against the CIT(A) s order dated 16.03.2007. 22. Clearly, the appellant/revenue s appeal was with regard to the merit of the additions that had been deleted by the CIT(A), while the respondent/assessee had preferred an appeal to agitate the contention concerning the legality of triggering reassessment proceedings against it. 23. The Tribunal, via the impugned order, dismissed the appeal of the appellant/revenue and allowed the appeal of the respondent/assessee. 24. It is against this backdrop that the appellant/revenue has preferred the above-captioned appeals. 25. Mr Sunil Agarwal, learned senior standing counsel, who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on either side. Originally under the partnership Deed dated 02.07.1999, partnership was constituted with four partners and Deed was revised on 22.11.1999 with the addition of another partner. As per clause 4.3 of the Partnership Deed, while mentioning the capital contribution of each partner, partners were allowed two years time in bringing their capital contribution. As could be seen from Page No. 465 of the Paper Book in balance sheet as on 31.03 .2000, capital introduced by each partner to the tune of Rs. 2,57,90,000/- was mentioned. The business was commenced on 26.092000. Search was conducted on 26.06.2002 and block assessment of the firm as well as five partners was framed on 27.02.2004. Copy of the Block Assessment order dated 27.02 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eration of the capital contribution of the partner and the difference in the value of the property was deleted by the Ld. CIT(A) and confirmed by the Tribunal. Further, even in the impugned order, the Ld. CIT(A) noted that in the block assessment the evidence in support of capital as well as the loans raised by the partners was furnished and was accepted without making any additions. On this score, Ld. CIT(A) vide paragraph No.5.6 of his order, held that the addition has to be deleted. Further, in view of the decisions reported in India Rice Mills 218 ITR 508 (All.), Bharat Engineering 83 ITR 187 (SC), and P. Mohankala 291 ITR 278 (SC) introduction of capital by partners credited in the firm's accounts is not taxable in the hands of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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