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TMI Blog2019 (2) TMI 1204X X X X Extracts X X X X X X X X Extracts X X X X ..... egistration of the partnership deed. Thus, in absence of income of its own, the firm could not have invested for purchase of land. Therefore, the investment has to be considered in the hands of the partner as their respective unexplained investment. Since, partners of the firm failed to respond to the notices issued by Assessing Officer, the entire investment of ₹ 15,45,00,000/- was added as unexplained investment u/s.69 of the Act, on protective basis in the hands of assessee partnership firm. It is an undisputed fact that the registered sale deed for purchase of land was executed on 10.10.2007 and the partnership deed was executed on 26.10.2007. Since, the partnership deed is subsequent to the date of purchase of land, the par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of ₹ 15,45,00,000/- made by Assessing Officer on account of undisclosed investment u/s.69 of the Income Tax Act, 1961 (hereinafter referred to as the Act ) on protective basis. 4. The brief facts of the case as emanating from records are: The assessee is a proprietorship firm and is a real estate developer. A search action u/s.132 of the Act was carried out at the business and residential premises of Patil Group of Aurangabad/Pune on 24.11.2011. During the course of search, various documents were seized. One of such document i.e. Loose Paper Bundle No.10 (pages 98 to 136) reveal that the partners of the firms had purchased land at Kompally, Hyderabad. As per the seized document, substantial on money was paid for purchase of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 02% After examining the facts and the source of investment for purchase of land, the Assessing Officer held that the investment for purchase of land was made by the partners. However, on account of non compliance by the partners, the Assessing Officer made addition of ₹ 15,45,00,000/- as unexplained investment u/s.69 of the Act on protective basis in the hands of assessee. 5. Aggrieved by the assessment order dated 27.03.2014 passed u/s. 144 r.w.s. 153C of the Act, the assessee filed appeal before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) sought report from the Assessing Officer regarding status of addition on account of unaccounted investment in the hands of individual partners and also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Settlement Commission wherein he offered ₹ 5.92 Crores as his share in the investment in land at Kompally. The Settlement Commission vide order dated 19.03.2015 accepted the same. The Commissioner of Income Tax (Appeals) in First Appellate Proceedings directed the Assessing Officer to ascertain the status of income offered/taxed on substantive basis in the hands of other partners. The Assessing Officer in his report pointed that apart from Shri B.R. Patil no other partner of the firm has admitted investment in land in their respective return of income. Further, he observed that it was the first year of existence of the firm and the land in question was purchased before registration of the partnership deed. Thus, in absen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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