9911796707
TMI Blog2007 (10) TMI 438X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.That the learned CIT(A), was not justified on facts and in law in holding that the appellant is responsible for payment of outstanding demand/dues of the firm M/s. Ganganagar Cotton Ginning and Pressing factory from which she had already retired. 2.That the learned CIT(A) was not justified on facts and in law in holding that the appellant was a partner of the dissolved firm, M/s. Ganganagar Cotton Ginning and Pressing factory in the assessment year 1999-2000 and also that she factually did not retire from the aforesaid firm in April, 1990. 3.That the learned CIT(A), was not justified on facts and in law in holding that : ( i )the partnership deed executed on 2-4-1990 did not evidence that the appellant opted out of the business. Fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment year 1999-2000, a tax demand of Rs. 15,57.66,510 was raised in respect of capital gains under section 45(4) of the Income-tax Act, 1961, on its dissolution. The Assessing Officer served demand notice on the dissolved firm and also on all the existing partners, individually who included both these appellants, who were treated as partners of the firm during the relevant period. The basic common contention of the appellants is that they were not partners in the dissolved firm at the relevant time and had retired much earlier, long before the dissolution and therefore, no demand notice could be served on them, in lieu of the demand raised against the firm. 3. The learned CIT(A) after considering the entire facts and circumstances o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 189(3), which provides that all the partners are jointly and severally liable for payment of demand. Thus, appeal is not maintainable." From the bare reading of the above, it is clearly revealed that the learned CIT(A) has given a finding that notices of recovery served on these appellants are premature . The Assessing Officer has to first take action under section 189(3) and only when he fails to recover the demand from the firm then he can take action against the partners. The appellants have even challenged the fact finding by teamed CIT(A) that these appellants were partners in the firm, inter alia. They have stated that they were not the partners in the firm at the time of its dissolution and as such they are not liable for its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, on the other, he is justifying the issue of demand notices. When the demand is being held as premature and the Department has not assailed the same, no question of issuance of demand notices arises. Ground No. (4) of these appeals is also allowed by holding that in the given facts and the circumstances of the case, no such demand notices could be issued. 6. In fact, all the common grounds raised in these appeals are interlined and interconnected. The perusal of the records reveals that the constitution of the firm underwent changes. Both these assessees joined the firm on 9-8-1977 having shares of 12 per cent each in the profits and losses of the firm. At that time total number of partners were 13, a copy of the partnership-deed is e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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