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TMI Blog2020 (2) TMI 360X X X X Extracts X X X X X X X X Extracts X X X X ..... rred as "ITAT"). 03-The facts of the case reveal that a search operation was carried out under Section 132 against the assessee on 24/09/1993 and during the course of search the assessee stated that he was initial partner of firm M/s. Radhakishan Balkishan carrying on the business of grocery (Kirana) along with sons. Later on, on account of his retirement from the partnership firm, his three sons namely Shri Gauri Shankar, Shri Shesh Narayan and Shri Ganesh Narayan continued with the business activities under the name and style of M/s. Gauri Shankar & Brothers. It was also stated by him that M/s. Shree Traders was the proprietary concern of of Shri Shesh Narayan engaged in teh business of money lending, cotton trading, etc., however, funds were supplied by the assessee M/s. Radhakishan Balkishan. 04-The facts of the case also reveals that M/s. Shree Traders was shown as branch of M/s. Gauri Shankar & Brothers since Assessment Year 1986-87 and the aforesaid fact was brought on record in the partnership deed on 06/04/1992 for the first time. The firm M/s. Gauri Shankar & Brothers was dissolved w.e.f. 01/04/1993 and its business activities have been taken over by M/s. Bhagat Brothe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d this addition in full stating that there is no concrete basis for estimation of income from money lending business. 09-The matter has finally reached the ITAT. The appeals were also filed by the Department and the ITA relying upon the decision of Hon'ble Supreme Court in the case of K.M. Sharma Vs. ITO reported in 254 ITR 772 has directed the Assessing Officer to apply Sub Section (1) & (2) of Section 150 of the Income Tax Act, 1961, which intends to lift the embargo of the period of limitation under Section 149 enabling the authorities to reopen the assessment not only on the basis of the order passed in the proceedings under the Act of 1961 but also on the basis of an order of a Court in any proceedings under any law. 10-The Income Tax Appellate Tribunal, Indore Bench, Indore relying upon the decision in the case of Jeetmal Nagri Vs. CWT reported in 148 ITR 139 (M.P.) has held that the income earned by Shri Harnarayan Bhagat should has been assessed in his individual capacity, whereas the income earned by his sons with the assistance of their shares provided to them under the partial partition of the HUF, should have been assessed in their HUF status, in case of each son ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roversy in the present cases is therefore, about validity of directions made by ITAT to make assessments Harnarayan Bhagat and his three sons in the new status of Individuals / HUFs after holding that the earlier assessments made in the status of HUF / Individuals were not correct. 15-Shri Harnarayan Bhagat was assessed in the status of HUF as Karta in respect of the business carried on in the name of Shri Radhakishan Balkishan. A partial partition of HUF business took place on 13/11/1974 in which Smt. Bansibai W/o Harnarayan, Shri Harnarayan and their three sons were given equal shares. The said partial partition was accepted by ITO under Section 171 of the Act of 1961. No business assets were left in the HUF and business of HUF came to an end after the said partition. 16-Since wife of Harnarayan Bhagat was also allotted her equal share in the above partial partition, so far as the HUF of Harnarayan Bhagat is concerned, Harnarayan was left as the sole surviving coparcener in said HUF and his status was converted into an individual in respect of assets allotted to him in the above partial partition, however, despite the said position, Shri Harnarayan wrongly filed the returns in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under partial partition should have been assessed in their HUF status, in case of each son consisting of himself, his wife and children. The issue was accordingly decided by ITAT in favour of assessees." 19-The respondents have further submitted that after coming to above conclusion that the assessment were made in wrong status, the ITAT has then in paragraph No.21 of its order, further directed the Assessing Officer to make assessment in case of Harnarayan Bhagat in his individual capacity and in case of three sons in the status of their HUF consisting in case of each son, of himself, has wife and their children, although period of limitation prescribed for their assessments have already expired. The said direction is challenged because such directions would have the effect of lifting bar of limitation prescribed for making the assessments in respective hands. 20-The contention of the learned counsel for the respondent is that so far as the decision of ITAT to the effect that, after the partial partition Harnarayan Bhagat could not be assessed in the status of HUF but he should have been assessed in the status of individual and his sons could not have been assessed in the status ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions mentioned in the proviso. A "finding" therefore, could only be that finding which was necessary for disposal of appeal with respect of assessment of a particular year. It was further held that the AAC might hold, on the evidence that the income shown by the assessee was not the income for the relevant year and thereby exclude that income from the assessment of the year under appeal. The findings in that context were that the income did not belong to the relevant year. He might incidentally find that the income belonged to another year, but that was not a finding necessary for disposal of appeal in respect of year of assessment in question. That the expression "any person" in second proviso of Section 34 (3) referred to one who would be liable to be assessed for the whole or part of income, that went into the assessment of the year of appeal or revision. The apex Court, therefore, held that the second proviso the Section 34(3) did not save the time limit prescribed under Section 34(1) in respect of escaped assessment of a year other than that which was subject matter of appeal or revision, as the case may be, and accordingly the notice issued in that case was held to be barre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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