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TMI Blog2021 (1) TMI 788X X X X Extracts X X X X X X X X Extracts X X X X ..... r the department to re-open the case of the assessee. Mr.Hemani is right in his submission that mere incorporation of interest on partners capital and remuneration does not necessarily mean or should be construed as mandatory. There has to be some material on record to indicate that the writ-applicant had actually received any 'interest on capital' or 'remuneration' from the partnership firm. Where no such income has been earned by the writ-applicant, the question of taxing the same does not arise at all. Applying the very same dictum of law as laid in the case of Alidhara Taxspin Engineers [ 2017 (5) TMI 1684 - GUJARAT HIGH COURT] we have no hesitation in arriving at the conclusion that the re-opening of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... letter dated 31st May 2018 along with the reasons recorded for re-opening and conveyed to the writ-applicant are at page-59 (Annexure-H colly.) to this writ-application. 3. It appears that the writ-applicant filed his return of income on 10th January 2012 for the Assessment Year 2011-12, declaring the total income at ₹ 2,10,660=00. Thereafter, the return was processed under Section 143(1) of the Act 1961 on 14th February 2012. 4. The record reveals that the writ-applicant is a partner in a partnership firm running in the name of M/s.Vijya Laxmi Exports. It appears that the Revenue Audit Party raised an audit objection in the case of M/s.Vijya Laxmi Exports. As per the audit objection, the partnership deed of M/s.Vijya Laxmi Expo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of ₹ 8,65,725=00 had escaped assessment within the meaning of Section 147 of the Act 1961 for failure on the part of the writ-applicant to disclose all the material facts fully and truly. 9. Upon receipt of the reasons for the re-opening of the assessment proceedings, objections were filed dated 28th June 2018 and the same came to be disposed of by the Revenue vide order dated 28th September 2018. 10. Being dissatisfied with the decision to re-open the assessment, the writ-applicant is here before this Court with the present writ-application. 11. This Court, while issuing the notice, passed the following order dated 26th December 2018 : 1. Mr.Tushar Hemani, learned advocate for the petitioner has invited the attention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has escaped assessment. It was further pointed out that in this case the impugned notice has been issued on 31st March, 2018 in relation to Assessment Year 2011-12 which is clearly beyond a period of four years from the end of the relevant assessment year without there being any failure on the part of the petitioner to disclose fully and truly all material facts necessary for his assessment, therefore, the assumption of jurisdiction on the part of the Assessing Officer under section 147 of the Act, is invalid. 3. Having regard to the submission advanced by the learned counsel for the petitioner, issue Notice returnable on 5th February, 2019. By way of ad-interim relief, the respondent is permitted to proceed further pursuant to the imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ears is not justified in any manner. 15. In such circumstances referred to above, Mr.Hemani, the learned senior counsel prays that there being merit in his writ-application, the same may be allowed and the impugned notice be quashed and set-aside. 16. On the other hand, this writ-application has been vehemently opposed by Ms.Raval, the learned senior standing counsel appearing for the Revenue. Ms.Raval would submit that having regard to the reasons assigned for re-opening of the assessment, this Court may not interfere. According to Ms.Raval, tangible material has come to the notice of the department, and on the basis of which, the department could be said to be justified in issuing the notice for the purpose of re-opening of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uneration' from the partnership firm. Where no such income has been earned by the writ-applicant, the question of taxing the same does not arise at all. 22. At this stage, we may look into the decision of this High Court in the case of PCIT vs. Alidhara Taxspin Engineers (Tax Appeal No.265 of 2017, decided on 2nd May 2017), wherein this Court considered two questions of law as proposed by the Revenue in the said appeal. The two questions of law which came to be considered by this Court are as under : Whether on the facts and circumstances of the case and in law, the Hon ble ITAT was justified in not appreciating the fact that by not providing interest and remuneration to the partners, the firm has claimed higher profits leading ..... X X X X Extracts X X X X X X X X Extracts X X X X
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