9911796707
TMI Blog2024 (1) TMI 1225X X X X Extracts X X X X X X X X Extracts X X X X ..... , AO found that as per the Non Filers Monitoring System (NMS), assessee has entered into transaction of sale of property pertaining to F.Y. 2010-11 relevant to A.Y. 2011-12, which was not disclosed. The 'reasons recorded' by the ld.AO are as under:- 01. The assessee Shri Bhagwan Laxman Rokde is an individual running a proprietary concern in the name and style M/s Onkar Developers. As per Non Filers Monitoring System (NMS) available in this office, the assessee has entered in to transactions of sale of immoveable property valued at Rs 30,00,000/- or more during the Financial Year 2010-11 relevant to AY 2011-12. However, the assessee has failed to file return of income for AY 2017-12 02. In order to verify the transaction of sale of immovable property reported under Non Filers Monitoring System (NMS), an Individual Transactions Statement available in the ITD system has been verified. On verification of Individual Transactions Statement, it is found that the assessee has entered into transaction of sale of immovable property valued at Rs 4,07,20,000/- on 5/10/2010 duly registered in the office of Sub Registrar, Kalyan -2. Thus the transaction of sale of property was pertaining to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have purchased any Immovable property. In so far as the transaction of sale reported in ITS is concerned, it may be noted that the said transaction pertains to transfer of development rights by M/s. Sai Developers, a firm wherein I am a partner. The copy of the said sale agreement registered on 05.10.2010 is attached herewith marked as Annexure 'A' for your kind perusal. Thus, it may be appreciated that the reasons recorded by Your Honour are Itself not related to me and are Incorrect for the reason that I have not entered into any transaction of sale/purchase of Immovable property. Thus, the very reason on which the edifice of reopening is based itself collapses and the reopening falls. 2. Your Honour may note that I am a small businessman engaged in the business of trading into footware in the name and style of Rahul Footware and small civil contract in the name and style M/S. Omkar Developers. My income did not exceed the maximum amount which is chargeable to tax. Accordingly, Your Honour may appreciate that I was not required to file the return of income for the year under consideration as per section 139(1) of the Act. Thus, as I was not required to furnish a return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -ownership In such cases the co-owner/conventurer is Individually liable to Tax iv. There also cannot be an excuse that PAN was not allotted at the time of registration of sale document, as they could have filed a belated return also. But till the date of re opening not a single return of income is found to have been filed by the so claimed Firm M/s Sai Developer v. This transaction pertains to sale of property. When the sale of property transaction is not disclosed, the transaction of purchase of the property is also not disclosed. When both purchase & sale transaction of property is not disclosed in the so claimed Firm Sai Developer by way of filing of return of income, the existence of the so called firm is not known to the department and therefore, was not considered for re-opening of assessment for escapement of income vi. As per ITS data, the information about cash deposits amounting to Rs 14,50,000/ Axis Bank and Rs. 10,50,000/- in Kalyan Janata Sahakari Bank, was available with the department and the assessee had sold immovable property during the year for Rs. 4,07,20,000/ vii. The assessee has failed to comply with the notices issued under Non-filer Monitoring Syst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the assessee. 3.5. It is pertinent to mention here that the Hon'ble Supreme Court of India in the case of Malabar Fisheries Co. Vs Commissioner of Income Tax (1979) 120 ITR 49 (SC) has held that the firm itself does not have any right on the assets held by the partnership firm and it is the partners who have the interest on the asset jointly. The relevant para is reproduced below "a partnership firm under the Indian Partnership Act, 1932, is not a distinct legal entity apart from the partners constituting it and equally in law the firm as such has no separate rights of its own in the partnership assets and when one talks of the firm's property or firm's assets all that is meant is property or assets in which all partners have a joint or common interest 04 In view of the above discussion, it is clear that the assessee, in his individual capacity, has carried out transaction of sale of immovable property and not discloses the said transaction. Therefore keeping in view the fact that the sale of property transaction has not been disclosed and not offered to tax in the alleged partnership firm and in view the fact that the assessee did not provide any information in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sai Developers. Assessee was one of the 4 partners in M/s. Sai Developers; * lastly, assessee had further explained that he was a small business man engaged in the business of trading footwear and civil contractor in the name and style of M/S. Omkar Developers and his income did not exceeded the maximum amount which is chargeable to tax and therefore, he was not required to file the return of income. 11. The ld. AO despite taking note of the fact of the sale deed which was between the two partnership firms and not by the assessee in his individual capacity nor anything pertain to the assessee in his individual capacity qua the said transaction, he still proceeded to entertain his 'reason to believe'. Even the partnership deed and the PAN of M/s. Sai Developers were also filed during the course of assessment proceedings, which AO has ignored. Now, whether the firm has disclosed the said transaction or not, and instead of proceeding against the firm, the ld. AO proceeded to make assessment by issuing notice u/s. 148, and also made the addition in the hands of the assessee for the entire value of transaction. Once, assessee has brought these facts on record, then ld. AO could not h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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