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TMI Blog2015 (5) TMI 437X X X X Extracts X X X X X X X X Extracts X X X X ..... acs only) was included in the income of M/s. R.B.S.D. (export firm) for assessment years 1950-51 to 1958-59; and 2. Whether on the facts and circumstances of the case, the Tribunal was justified in law in sustaining the addition of Rs. 1.71 crores (Rs. One crore Seventy one lacs only) as the income of assessee from under invoicing in respect of export transactions ?" 2. Accordingly, we have heard Shri De, learned counsel for the applicant Official Liquidator as assessee company is under winding up orders and Shri Parchure, learned counsel for the respondent - Income Tax department. 3. On 26.03.2015, this Court has passed an order in the matter and after briefly referring to question arisen, this Court found it necessary to go through the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. The assessee Private Limited Company and the other assessee (Export firm - not party), appeared to be two units which belong to a group of companies commonly known as Durgaprasad and More group of companies. Both assessees deal in export of manganese to various countries. During search and seizure proceedings conducted at residential premises of partners of Export firm and at the office of the Limited Company in 1963, the Enforcement Department of income-tax seized various books of accounts and documents. According to Enforcement Authorities/ Income Tax Authorities, both the assessee indulged in under invoicing of Export commodity. Real profit derived was not entered in the books of accounts produced before them. The assessments of both ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore this Court of Rs. 1,70,90,669/as determined by I.T.A.T. is, therefore, not correct. 6. As we have already stated above, the other assessee is not party before us and addition of amount of Rs. 1,70,90,669/to the income of Export firm and its assessment accordingly is not in dispute. We accordingly answer Question No. 1 in the affirmative. 7. The second question to be looked into is the important question. Assessee private limited company has submitted that as income of Rs. 1,70,90,669/is already assessed to tax at the hands of Export firm, Private Limited company cannot be called upon to pay tax upon that income again. 8. Shri De, learned counsel, has relied upon Circular No. 157 dated 26.12.1974 and judgment of the Hon'ble Apex C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er person i.e. the beneficiary or the trustee. Thus, this circular speaks of assessee which is representative in nature and the real owner or beneficial owner. Thus, income as disclosed must be assessed either as income of representative assessee or then income of beneficial owner/ trustee. Very same income cannot be subjected to tax at the hands of representative assessee as also its beneficial owner/ trustee. 11. The judgment of the Hon'ble Apex Court in the case of ITO vs. Bachu Lal Kapoor (supra) speaks of assessment of a HUF. The Hon'ble Apex Court has held that a HUF as a separate unit of assessment, entitled to be assessed as distinct entity. Being person, it is liable to be taxed in respect of its income. Member of that HUF ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was assessed to tax in the hands of the individual members (which should not have been done), the revenue has to make appropriate adjustments as otherwise assessment made in respect of that income on the HUF would be contrary to the provisions of the Act. The Hon'ble Apex Court has also observed that appropriate adjustments by revenue in such matter is not reopening of final orders of assessment but in reality, to arrive at the correct figure of tax payable by the HUF. 12. In the case of Jamnaprasad Kanhaiyalal vs. Commissioner of Income Tax, M.P., Bhopal, reported at (1981) 3 SCC 441, the Hon'ble Apex Court has held that voluntary declaration under Section 24 of the Finance Act, 1965, relates to income earned by the declarant only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) one tax is against property and the other is not a property tax, or (d) the double taxation is indirect rather than direct. Thus, in this background, when present facts are examined, it is apparent that the assessee Private Limited company is not disputing the act of I.T.A.T. in treating amount of Rs. 1.71 Crore as its income. There is no challenge to this addition. The only contention is, as said amount is already taxed and Export firm is made answerable for that tax or sum, taxing Private Limited company is double taxation. The amount has actually gone into the coffers of Export firm which has appropriated it as its income and used it. The payment of tax by it, therefore, is natural and is not being objected to. The Private Limited comp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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