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TMI Blog2000 (4) TMI 191X X X X Extracts X X X X X X X X Extracts X X X X ..... the firm w.e.f. 1-9-1980. Shri N.T. Kirtane retired from the partnership on 31-8-1980 and a new partnership deed was executed on 4-9-1980, comprising of two partners, Shri B.R. Pandit and Shri S.B. Pandit having 60% and 40% share of profit and loss respectively. These two partners decided to form another partnership firm for carrying on the profession of Consultancy in finance and management. The deed of partnership was executed on 10-4-1980. Their shares of profit and loss in the firm were ............... S.B. Pandit - 75% and B.R. Pandit-25% (This firm started its profession under the name and style of Kirtane Pandit Associates). Both these firms carried on business from the same premises. 2.1 The assessee firm filed its return of in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... particulars of income. According to the assessee, mere addition to the taxable income was not sufficient for levy of penalty for concealment. The reliance was placed on the decision of the Madhya Pradesh High Court in Harak Chand Phool Chand Jain v. CIT[1984] 146 ITR 25, CIT v. G.D. Naidu [1987] 165 ITR 63 (Mad.), and CIT v. Calcutta Credit Corpn. [1987] 166 ITR 29 (Cal.). The Assessing Officer rejected the explanation of the assessee and held that the assessee had concealed income by furnishing inaccurate particulars of income on the following grounds : (1) that the new firm was formed to defraud the revenue. It was substantiated by the fact that the return was filed in a different ward, (2) all the activities of both the firms were carr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... new firm on different facts and therefore, no reliance could be placed by the assessee on this aspect. Further all the expenses of the new firm were incurred by the assessee firm and the assessee itself included the income of the new firm in the return filed under section 148. Hence he rejected the contention of the assessee that such income was shown to avoid litigations. Filing of the return with different ward, according to the CIT(A) showed the mala fide intention of the assessee, Thus, he confirmed the finding of the Assessing Officer that formation of the new firm was to avoid the tax. Aggrieved by the same, the assessee is in appeal before the Tribunal. 5. The Ld. counsel for the assessee has assailed that order of CIT(A) by rais ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessing Officer was not justified in applying the Explanation under section 271(1)(c) as existed prior to 1-4-1975. In fact, the Explanation applicable to the year under consideration has not been invoked by the Assessing Officer and accordingly the onus was on the revenue to prove the concealment by bringing on record the positive evidence. Reliance was placed on the decisions of Bombay High Court in CIT v. P.M. Shah [1993] 203 ITR 792 and CIT v. Dharamchand L. Shah [1993] 204 ITR 462. The Ld. D.R. has repeated the reasonings given by the CIT(A) and the Assessing Officer. 6. Rival submissions of the parties, and the materials placed before us, have been considered carefully. In view of the Bombay High Court judgments in the case of P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rofession of audit and taxation under the deed of partnership dated 16-7-1973 comprising of three partners viz. Shri N.T. Kirtane, Shri B.R. Pandit and Shri S.B. Pandit. During the existence of this partnership, a new partnership was formed between two parties viz. Shri S.B. Pandit and Shri B.R. Pandit having share of profit of 75% and 25% respectively. It is pertinent to note that change in the constitution of the existent partnership was after the formation of a new partnership i.e. after a period of four months. So it could not be said that the constitution of both the firms were same at that time, even the share of profit was different from the original firm. In law, there is no prohibition to form different firm with the same constitut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied to distinguish this aspect by holding that facts were different for A.Y. 1983-84 onwards but he has not indicated as to what were the different facts. He has merely quoted some observations of order of AAC. We have gone through the said order of AAC. It was contended before him that facts to that year were 'different inasmuch as separate accounts were maintained and expenses were incurred separately. It is on the basis of such contention the case was restored by AAC to the Assessing Officer for fresh adjudication. There after the registration was allowed by the Assessing Officer but the fact remained that registration was allowed in respect of the same partnership. In our opinion, if a particular partnership has been accepted as valid f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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