TMI Blog2023 (3) TMI 1437X X X X Extracts X X X X X X X X Extracts X X X X ..... premises of a partnership firm cannot, ipso facto, mean that the same was found from the possession of a partner. There is no dispute that the impugned document, around which the quarrel revolves, was found from the business premises of the partnership firm.The above document is unsigned and it can be seen that there are four legal heirs of the deceased Late assessee. Most surprisingly, none of the legal heirs have been examined by the Assessing Officer in respect of the alleged receipt of Rs. 6.50 crores by them for the alleged relinquishment of shares in the said Farm House. We have given thoughtful consideration to the assessment order but fail to find any reference to any partnership deed of the firm in which the deceased Late Shri Kulbir Singh Punihani was a partner alongwith his brothers. We do not know what the relevant clauses of the partnership deed are relating to the demise of any working partner. Therefore, we are not in a position to understand what would be the fate of a partnership firm on the demise of a partner. It is clear that capital account of Late Shri Kulbir Singh Punihani was transferred to loan account of Smt. Saloni Punihani and which was subseque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .06.2022 pertaining to A.Y. 2014-15. 2. Since the underlying facts in issues in both the appeals are identical, they were heard together and are disposed of by this common order for the sake of convenience and brevity. 3. Representatives of both the sides agreed to consider the facts of ITA No. 1746/DEL/2022 wherein the grounds of appeal read as under: 1(i) That on the facts and circumstances of the case, the Ld. CIT(A) was not justified in upholding the validity of assessment order u/s 153A r.w.s. 143(3) dated 09/07/2021 even though the notice u/s 153A and consequential assessment is illegal and void-abinitio in the absence of any incriminating material. (ii) That this is a case of completed/unabated assessment on the date of search on 04/01/2019 and in absence of seizure or discovery of any incriminating material from the premises of the appellant, the action u/s 153A of the Income Tax Act, 1961 is contrary to the scheme and settled legal position. (iii) That there being separate and independent panchnama in the case of the firm and the appellant and the alleged document forming the basis of the assessment proceedings u/s 153A having been found from pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for any such presumption on part of the CIT(A). (ii) That the Ld. CIT(A) while upholding the addition failed to consider and appreciate clarification vide amendment deed to memorandum of family arrangement and as such the adverse inference is misconceived and not in conformity with legal principles. (iii) That in absence of any incriminating material, the Ld. CIT(A) was not justified in upholding of addition u/s 69 which is contrary to the scheme of section 153A and same is invalid and without jurisdiction. 5. That on the facts and circumstances of the case, the addition u/s 69 and invocation of section 115BBE of the Income Tax Act, 1961 is illegal and not sustainable on facts and under the law. 6. That on the facts and circumstances of the case, the Ld. CIT(A) has erred in upholding the validity of the order u/s 153A r.w.s 143(3) even though the same was passed without proper approval u/s 153D of the Income Tax Act, 1961. 7. That the orders passed by lower authorities are not justified on facts and same are bad in law. 8. That the appellant craves leaves to add, alter, amend, forgo any of the grounds of appeal at the time of hearing. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these terms: Where any Central Act enacts that income-tax shall be charged for any year at any rate or rates tax at that rate or those rates shall be charged for that year in accordance with, and subject to the provisions of, this Act in respect of the total income of the previous year of every individual, Hindu undivided family, company and local authority, and of every firm and other association of persons or the partners of the firm or the members of the association individually. 9. From the above, it is clear that in so far as Income tax assessments are concerned, a partnership firm and a partner are distinct entities, which means that any document found from the business premises of a partnership firm cannot, ipso facto, mean that the same was found from the possession of a partner. 10. There is no dispute that the impugned document, around which the quarrel revolves, was found from the business premises of the firm M/s Punihani International. 11. A reverse situation was considered by the Hon'ble Bombay High Court in the case of Tirupati Oil Corporation 248 ITR 194 wherein the quarrel was in respect of undisclosed income of a partner treated as undisclose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 dt. 15.06.2013 75,00,000.00 Cheques are drawn on Oriental Bank of Commerce, Greater Kailash II, New Delhi 110048. We further certify that the payment of respective share of the Farm House in full discharge of all our respective claims and demand for relinquishing our shares as mentioned above. Signed Mr. Tarlok Singh Punihani Ms. Jaswani Kaur [Mother] Ms. Saloni Punihani [Wife] Ms. Sumeet Oberai [Daughter] Ms. Simmarjeet Punihani [Daughter] Ms. Jasmine Punihani [Daughter] Witness. 13. The bone of contention is that the alleged payment of Rs. 6.50 crores in cash, with the two payments made by cheques were found to be reflected in the bank statement and the Assessing Officer/ld. CIT(A) presumed that the payment of Rs. 6.50 crores in cash was also made by the assessee for effecting the relinquishment of 50% of shares in the Farm House situated at F-5, Radhey Mohan Drive, Gadaipur, Meharauli. 14. The above document is unsigned and it can be seen that there are four legal heirs of the deceased Late Shri Kulbir Singh Punihani. Most surprisingly, none of the legal heirs have been examined by the Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Road, Gadaipur, Mehrauli. To placate my claims a memorandum family arrangement dated 02-01-2012 was drawn. Later an addendum dated 31-12-2013 to the said memorandum of family arrangement was executed for removal of inconsistencies in the stated memorandum of family arrangement. 4. After the demise of my husband Shri Kulbir Singh Punihani his outstanding capital balance in the books of M/s. Punihani International was transferred to my loan account which was repaid by M/s. Punihani International over the period of time. 5. Subsequently, I approached Shri Tarlok Singh Punihani and Shri Narinder Singh Punihani for financial assistance and assured them I have no objection if the property at F-5 Radhey Mohan Drive, Bandh Road, Gadaipur, Mehrauli is sold by M/s. Punihani International. Shri Tarlok Singh Punihani and Shri Narinder Singh Punihani agreed to my proposal and advanced unsecured loans to me in their individual capacities through proper banking channel as per my needs. A statement showing details of funds advanced by Shri Tarlok Singh Punihani and Shri Narinder Singh Punihani to me is as under: 6. Neither Shri Tarlok Singh nor Shri Narinder Singh ever ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d his heirs Smt. Saloni Punihani and their daughters Smt Sumeet Obhrai, Ms. Simmerjit Punihani and Ms. Jasmine Punihani never held any share in the property situated at F-5 Radhey Mohan Drive, Bandh Road, Gadaipur, Mehrauli. However, to placate the claims of Smt. Saloni Punihani a memorandum family arrangement dated 02-01-2012 was drawn. Later an addendum dated 31-12-2013 to the said memorandum of family arrangement was executed for removal of inconsistencies in the stated memorandum of family arrangement. 4. After the demise of my brother Kulbir Singh Punihani his outstanding capital balance in the books of M/s. Punihani International was transferred to Smt. Saloni Punihani s loan account which was repaid by M/s. Punihani International over the period of time. 5. Subsequently, Smt. Saloni Punihani approached me and my brother Shri Narinder Singh Punihani for financial assistance and assured us that she has no objection if the property at F-5 Radhey Mohan Drive, Bandh Road, Gadaipur, Mehrauli is sold by Ms. Punihani International. We agreed to the proposal of Smt. Saloni Punihani, I and my brother Shri Narinder Singh Punihani in our individual capacities advanced un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... name of Shri Tarlok Singh Punihani, Narinder Singh Punihani and Shri Amarjeet Singh Punihani and capital account of Shri Kulbir Singh Punihani was transferred to Smt. Saloni Punihani, wife of the assessee, and is reflected under the head unsecured loan , which means that all that the firm owes to the erstwhile partner is the unsecured loan which was repaid subsequently by the partnership firm. 25. In light of these facts, the impugned additions do not have any legs to stand on. 26. The above mentioned facts can be looked upon from another legal angle. The undisputed fact is that the alleged documents were found from the business premises of the partnership firm M/s Punihani International. Assessments of the assessee are unabated assessments on the date of search, which means that the ratio laid down by the Hon'ble Delhi High Court in the case of Kabul Chawla in 380 ITR 573 and Meeta Gutgutia Prop. M/s. Ferns N Petals in ITA No.306 to 308/2017 dated 25.05.2017 squarely apply. The relevant findings of the Hon ble High Court read as under: 37. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment. 38. The present appeals concern A.Ys 2002-23, 2005-06 and 2006-07. On the date of the search the said assessments already stood completed. Since no incriminating material was unearthed during the search, no additions could have been made in the income already assessed. 27. Considering the facts of the case in totality, in light of the judicial decisions discussed hereinabove, we do not find any merit in the impugned additions and, therefore, we direct the Assessing Officer to delete the impugned additions from the hands of both the appellants under consideration. 28. Before parting, the assessee has also challenged the assessment claiming that the same was passed without proper approval u/s 153D of the Act. This ground was not seriously contested by the ld. counsel for the assessee . Therefore, the same is dismissed as not pressed. 29. In the result, the appeals of the assessees in ITA Nos. 1745 1746/DEL/2022 are partly allowed. The order is pronounced in the open court on 10.03.2023. - - T ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
