MANGALDEEP SUPERSTRUCTURES PRIVATE LIMITED,MUMBAI vs. INCOME TAX OFFICER, NATIONAL E ASSESSMENT CENTRE

Assessee by : Letter file Revenue by : Shri. R. R. Makwana Date of Hearing 11.02.2025 Date of Pronouncement 14.02.2025 आदेश / O R D E R PER RENU JAUHRI [A.M.] :- This appeal is filed by the assessee against the order of the Learned Commissioner of Income-tax (Appeals), Mumbai/National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”] dated 11.09.2024 passed u/s. 250 of the Income-tax Act, 1961 [hereinafter referred to as “Act”] for Assessment Year [A.Y.] 2018-19.

A.Y. 2018-19 Mangaldeep Superstructures Pvt. Ltd. 2. The assessee has raised the following grounds of appeal:

1. Because the learned CIT (A) grossly erred in dismissing the grounds No.2 of First Appeal regarding adopting the business income as per oder u.s 143(1) dated 02/10/2019 at Rs. 3746879 as against the returned business income at Rs. 3091693/- while passing the assessment order u/s 143(3).

2. Because the learned CIT(a) grossly erred in dismissing the ground No.3 of first appeal regarding addition of Rs. 318203/- in respect of share of profit from partnership firm in the order dated 02/10/2019 u/s 143(1). The addition has resulted in double taxation which is not permissible under the Act. The share of profit from partnership firm has already been taxed in hands of Partnership firm. The share of profit from partnership firm which is separately assessed as such is exempt u/s 10(2A) of the 1. T. Act in hands of partner assesse company.

3. Because the learned CIT(A) grossly erred in dismissing the ground No.4 of First appeal regarding addition of Rs. 336983/-to the returned business income in the order u/s 143(1) dated 02/10/2019 by disallowing statutory contribution received from employees but not deposited to the relevant fund by the due dated under the respective law but before the filing of the return of income under section 139(1) of the I. T. Act.”

3. Brief facts of the case are that the assessee filed its return for AY 2018-19 on 31.10.2018 declaring total income of Rs. 34,01,110/-. The case was selected for scrutiny and the assessment was completed at an income of Rs. 76,28,160/- vide order dated 20.04.2021. However, while computing the income, Ld. AO adopted the figure of income as per the order u/s 143(1) of Rs. 37,46,879/- (instead of the returned income) and proceeded to make further additions on various grounds.

4. Aggrieved with the order of Ld. AO, the assessee filed an appeal before Ld. CIT(A), wherein he also raised the issue of addition of Rs. 31,82,203/- in respect of share of profit from the partnership firm made in the order u/s 143(1) dated 02.10.2019. The assessee had received the share of profit from A.Y. 2018-19 Mangaldeep Superstructures Pvt. Ltd. partnership firm ‘Prime Mangaldeep JB’ in which he had profit sharing ratio of 49%. However, Ld. CIT(A) did not adjudicate the issue on the ground that it was arising out of the order u/s 143(1) dated 02.10.2019 which is an independent and separately appealable order. Aggrieved with the order of Ld. CIT(A), the assessee has filed an appeal before the Tribunal.

5. Grounds No. 1 & 2: Addition of share of profit from the partnership firm - Rs. 31,82,203/-. 5.1 Before us, Ld. AR pointed out that the share of profit from the partnership firm amounting to Rs. 31,82,203/- was wrongly added u/s 143(1) of the Act whereas the same is clearly exempt u/s 10(2A) of the Act. It has been submitted by Ld. AR that notice u/s 143(2) was issued on 23.09.2019 and during the pendency of assessment proceedings, the CPC issued intimation u/s 143(1) on 02.10.2019. Thereafter, the assessment order u/s 143(3) was passed on 20.04.2021 incorporating the addition made u/s 143(1) of the Act.

Ld. AR argued that the addition of share of profit from the partnership firm in the assessee’s hands amounts to double taxation since it has already been taxed in the hands of the partnership firm.

Ld. DR, on the other hand, strongly relied on the order of Ld. CIT(A).

A.Y. 2018-19 Mangaldeep Superstructures Pvt. Ltd. 5.2 We have heard the rival submissions. It is clear that the share of profit from the partnership firm, which is separately assessed to tax is exempt in the hands of the partners u/s 10(2A) of the Act. Accordingly, the addition made on this account is not justified. Ld. CIT(A)’s stand that the issue does not arise from the impugned order is also not correct, as by taking the figure of income from the order u/s 143(1), the addition on account of share of profit from the partnership firm has been incorporated in the order u/s 143(3). We, therefore, hold that the addition deserves to be deleted in view of clear provisions of section 10(2A) of the Act.

of the assessee is rejected.

7. In the result, the appeal of the assessee is partly allowed. Order pronounced in the open court on 14.02.2025.