ITO, JAMSHEDPUR vs. M/S S.P ASSOCIATES, JAMSHEDPUR

1 ITA No.80/Ran/2016

IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI BENCH, RANCHI

BEFORE SHRI N.S.SAINI, ACCOUNTANT MEMBER & SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA No.80/Ran/2016 A.Y. : 2005-2006 ITO, Ward-3(1), vs M/s S.P. Associates, 47,C.H.Area, Jamshdpur 39,Mills & Godown Area Burma Mines, Sakschi, Jamshedpur-831006 PAN No. : AAYFS 5544 F Respondent (Appellant) .

Revenue by :Shri P.K.Mondal, JCIT Assessee by : Shri S.K.Poddar & Devesh Poddar, Adv. Date of Hearing : 23.05.2018 Date of Pronouncement : 25.05.2018 O R D E R Per Pavan Kumar Gadale, JM: This is an appeal filed by the Revenue against the order of CIT(A),

Jamshedpur, dated 18.12.2015, for the assessment year 2005-06, wherein

the Revenue has raised the following grounds of appeal :-

“(1) On the facts and in the circumstances of the case, the Ld. CIT(A), Jamshedpmur, is not justified in appreciating the judgment of Hon’ble High Court of Jharkhand, directing the Assessing Officer to examine the full facts of the case while making fresh assessment. The Hon’ble High Court of Jharkhand had not restricted the Assessing Officer while making assessment afresh.”

income on 31.10.2005 declaring total income at Rs.1,99,642/-.The case

was selected for scrutiny as per Board’s guidelines. Subsequently notices

2 ITA No.80/Ran/2016 u/s.143(2) & 142(1) of the Act were issued to the assessee. The return was

accompanied by Tax Audit Report in Form 3CB and 3CD along with

audited profit and loss account and balance sheet. Thereafter the AO

completed the assessment making certain additions, against which the

assessee filed appeal before the CIT(A) and the CIT(A) deleted some of

the additions. Against the deletion of additions by the CIT(A), the Revenue

preferred appeal before the Tribunal and the Tribunal sustained the entire

additions made by the AO. Thereafter the assessee appealed before the

Hon’ble High Court and the Hon’ble High Court set aside the order passed

by the ITAT and matter was remanded to the file of AO for fresh

adjudication. In the fresh assessment the AO made addition on account of

undisclosed income, commission, capital introduced by the partners u/s.68

&69 of the Act and assessee the total income at Rs.1,31,49,490/- and

passed order u/s.143(3)/250/260/143(3) of the Act, dated 28.03.2014.

appeal with the CIT(A). In the appellate proceedings ld. AR of the

assessee argued the grounds and reiterated the submissions and ld.CIT(A)

having considered the findings and the submissions of the assessee dealt

on the disputed issue and partly allowed the appeal of the assessee.

before the Tribunal.

Hon’ble High Court.

3 ITA No.80/Ran/2016 6. Contra, ld. AR of the assessee relied on the order of High Court and

the directions and also filed an undertaking in respect of withdrawal of

partners appeals before the CIT(A).

record. The sole disputed issue raised by the department that the CIT(A)

should not have deleted the addition and also the directions of Hon’ble

Jharkhand High Court has not been considered. On the query from the

bench as to what is the position of the partners against whom this addition

has been made, ld.AR submitted that the appeals are pending before the

CIT(A) and we are of the opinion that the double addition in respect of

capital cannot be taxed in the hands of the firm and also with the partners. We also considered the directions of Hon’ble High Court dated 27th July,

2012 In Tax Appeal No.36 of 2010, which reads as under :-

“Heard learned counsel for the parties. The following questions of jaw are involved in this appeal: 'Whether the Revenue could have tax the same 1. amount in the hands of the firm as well as in the hands of the partners. Whether the Tribunal has committed error of law in 2. allowing the appeal of the Revenue with respect to deletion or addition of Rs.23,74,842/- which was added in the income of the assesses in view of the report submitted by the Assessing Officer upon requisitioning by the Income Tax Appellate. Tribunal when according to the Revenue, the Assessing Officer did not comply with the direction of the C.I.T. (Appeals) and did not submit the report of the enquiry in terms of the letter dated 02.04.2009. So far as first issue is concerned, learned counsel for the appellant submitted that the same income has now been assessed in the hands of the partners of the firm who are Shri Jawahar Lai Vig, Shri Harish Kumar Vig and Shri Om Prakash Jaggi and at the same time by the impugned order, the same amount which has been assessed

4 ITA No.80/Ran/2016 in the hands of the assesses firm. Learned counsellor the appellant has placed on record the copies of the orders passed in the assessment cases of the partners. In view of the above reasons the legal question arises that, whether the amount can be taxed in two different hands, therefore, the appeals succeed on this point and the matter is required to be remanded to the Assessing Officer for finding out about the fact of the assessment of partners as the appellant has placed on the record only assessment order made by the Assessing Officer and whether that order attained the finality or not is not known, therefore, the issue no.1 is decided accordingly and the order in relation to the allowing the appeal of the revenue for taxing the amount in question in the hands of the firm is set aside and the matter is remanded to the Assessing Officer.”

Ld. AR gave an undertaking that he will withdraw the appeals filed before

the CIT(A) and also file proof before the Tribunal. Accordingly, considering

all the aspects and the undertaking made by the ld. AR of the assessee at

bar, we are of the opinion that the CIT(A) has passed a reasoned order

considering the submissions and judicial decisions. Thus, we uphold the

order of the CIT(A) and dismiss the ground of appeal of the Revenue.

Sd/- Sd/- (N.S.SAINI) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER Ranchi, Dated 25/05/2018 Prakash Kumar Mishra , Sr. Ps Copy of the Order forwarded to : 1. The Appellant – 2. The Respondent – 3. The CIT(A) concerned 4. CIT , concerned BY ORDER, 5. DR, ITAT, Ranchi //True Copy// 6. Guard file. SR.PS, ITAT, RANCHI