9911796707
TMI Blog1981 (9) TMI 179X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment u/s 143(3)of the IT Act, by his assessment order dt.7th March, 1978. In this order, the ITO accepted the appellant s claim that 50% of his share income for his 4 annas share in the registered firm of M/s. Shiv Narain Karmendra Narain of Aligarh, belonged to the estate of his deceased wife, Smt. Vishwa Mohini Agrawal, and allowed a deduction of Rs. 6,30,214 from the share of profit of Rs. 12,65,000 taken for the appellant s share from the registered firm of M/s Shiv Narain Karmendra Narain. Similarly, the ITO allowed the following two deductions of interest payments as admissible: 1.Master Pravin Kumar Agrawal Rs. 31,860 2.Master Pavan Kumar Agrawal Rs. 30,321 The ITO also accepted the agrl. income of Rs. 3,43,160 as shown by the appellant. 3. The above mentioned assessment order of the ITO was considered by the Commr. to be erroneous and prejudicial to the interests of revenue. He, therefore, issued a notice u/s 263 of the Act calling upon the appellant to show cause against his proposed order u/s 263 setting aside the assessment. After considering the objections of the appellant, the Commr. held that the ITO had accepted the claims of the appellant in regard to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d certainly affect the tax chargeable from the assessee. Viewed in this light, the Commr. was of the view that the order of the ITO also appeared to be erroneous and prejudicial to the interest of the Revenue. He, therefore, held that this was a fit case where the provisions of s.263 of the Act should be invoked. Accordingly, he set aside the assessment made by the ITO and restored the matter to the IAC(Assessment), Agra, for making a fresh assessment in accordance with law after making all the necessary inquiries and in accordance with the observations made in his order. He further directed that the assessee shall be given a proper opportunity of being heard. Aggrieved by this order of the CIT, the appellant has preferred the present appeal to the Tribunal. 4. We have heard Shri Singhal, the ld. Chartered Accountant of the appellant and Shri Madan, the ld. Deptl. Rep. and carefully considered their submissions in the light of the materials placed before. 5. The first objection of the appellant was that the Commr. was not justified in invoking the provisions of s. 263 of the Act in the present case as the ITO had made a proper assessment after examining the various points raise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wal under the memorandum of partial partition dt.2nd January, 1963. In fact, this position was not disputed by the Department, as rightly contended by Shri Singhal on behalf of the appellant. The Revenue s case was that this 50% share of the appellant s wife would be incredible in the hands of the appellant u/s 64(1) of the IT Act,1961,on the basis that there was a sub-partnership constituted between the appellant and his wife under the memorandum of partial partition dt.2nd January, 1963. This position has been rejected by the Hon ble Allahabad High Court in the appellant s own case in respect of the asst. yr.1966-67 to 1970-71 to which the CIT has referred. In (1980) 19 CTR (All) 314, Shiv Narain Agrawal vs. CIT the following two questions were referred to the Hon ble Allahabad High Court in respect of asst. yrs. "I Whether on a true construction of the memorandum dt.2nd January 1963 the Tribunal could on the facts and in the circumstances of the case, legally draw an inference that the business which the assessee carried on as a partner of M/s Shiv Narain Karmendra Narain was so carried on by him on his own behalf and also on behalf of his wife constituting the sub partnership ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wards to her estate from the share income of the appellant for the said assessment year. In fact, this position was also not contraverted by the ld. Deptl. Rep., who however, submitted that the Revenue was taking up the matter on further appeal to the Supreme Court and would, therefore, like to keep the matter alive in the present case also. Shri Singhal further submitted that whatever may be the position in respect of the earlier assessment years, that so far as the present assessment year is concerned, even s.64(1)could not be invoked for inclusion of this 50% share income which belonged to the estate of Smt. Vishwa Mohini Agrawal, who was no longer alive. There is considerable force in this submission of the ld. Chartered Accountant, as s. 64(1)cannot apply to the facts of the present case on account of the death of the appellant s wife on 15th July, 1973. The facts mentioned above, would clearly show that ITO had made proper inquiries and after being satisfied with the appellant s claim had allowed the same, particularly in the light of the decision of the appellate Tribunal for the later assessment years from 1971-72 to 1973-74. We, therefore, respectfully follow the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O before allowing these claims. 9. The last objection of the Commr. is to the acceptance of Agrl. income of Rs.3,43,160 as shown by the appellant. According to the Commr., the ITO had not made any proper inquiries, but had simply accepted the assessee s claim. This conclusion of the Commr. also seems to be unsustainable on facts. It is seen from the assessment order passed in the assessee s own case for the asst.yr.1976-77 on26th September, 1978that the ITO had accepted the Agrl. income of the assessee for that year at Rs.3,28,342.Similarly,for the asst.yr.1977-78,the IAC(A)has accepted the assessee s Agrl. income for the rate purpose at 20,942 as shown by the assessee. The reopened assessment for 1974-75 was also completed by the IAC(A) by his order dated25th February, 1981,wherein he accepted the Agrl. income shown by the assessee at Rs.1,43,839 after examining the evidence produced by the assessee. The above facts would show that the appellant is having substantial Agrl. income and this has been recognised and accepted by the department itself in the earlier assessment years and also in the subsequent assessment years. In fact, the ld. counsel referred us to the receipt at pag ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
