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TMI Blog2023 (3) TMI 1437X X X X Extracts X X X X X X X X Extracts X X X X ..... of a partnership firm cannot, ipso facto, mean that the same was found from the possession of a partner. There is no dispute that the impugned document, around which the quarrel revolves, was found from the business premises of the partnership firm.The above document is unsigned and it can be seen that there are four legal heirs of the deceased Late assessee. Most surprisingly, none of the legal heirs have been examined by the Assessing Officer in respect of the alleged receipt of Rs. 6.50 crores by them for the alleged relinquishment of shares in the said Farm House. We have given thoughtful consideration to the assessment order but fail to find any reference to any partnership deed of the firm in which the deceased Late Shri Kulbir Singh Punihani was a partner alongwith his brothers. We do not know what the relevant clauses of the partnership deed are relating to the demise of any working partner. Therefore, we are not in a position to understand what would be the fate of a partnership firm on the demise of a partner. It is clear that capital account of Late Shri Kulbir Singh Punihani was transferred to loan account of Smt. Saloni Punihani and which was subsequently paid by the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts in issues in both the appeals are identical, they were heard together and are disposed of by this common order for the sake of convenience and brevity. 3. Representatives of both the sides agreed to consider the facts of ITA No. 1746/DEL/2022 wherein the grounds of appeal read as under: "1(i) That on the facts and circumstances of the case, the Ld. CIT(A) was not justified in upholding the validity of assessment order u/s 153A r.w.s. 143(3) dated 09/07/2021 even though the notice u/s 153A and consequential assessment is illegal and void-abinitio in the absence of any incriminating material. (ii) That this is a case of completed/unabated assessment on the date of search on 04/01/2019 and in absence of seizure or discovery of any incriminating material from the premises of the appellant, the action u/s 153A of the Income Tax Act, 1961 is contrary to the scheme and settled legal position. (iii) That there being separate and independent panchnama in the case of the firm and the appellant and the alleged document forming the basis of the assessment proceedings u/s 153A having been found from premises of the firm, the proceedings u/s 153A in the case of the appellant on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and appreciate clarification vide amendment deed to memorandum of family arrangement and as such the adverse inference is misconceived and not in conformity with legal principles. (iii) That in absence of any incriminating material, the Ld. CIT(A) was not justified in upholding of addition u/s 69 which is contrary to the scheme of section 153A and same is invalid and without jurisdiction. 5. That on the facts and circumstances of the case, the addition u/s 69 and invocation of section 115BBE of the Income Tax Act, 1961 is illegal and not sustainable on facts and under the law. 6. That on the facts and circumstances of the case, the Ld. CIT(A) has erred in upholding the validity of the order u/s 153A r.w.s 143(3) even though the same was passed without proper approval u/s 153D of the Income Tax Act, 1961. 7. That the orders passed by lower authorities are not justified on facts and same are bad in law. 8. That the appellant craves leaves to add, alter, amend, forgo any of the grounds of appeal at the time of hearing." 4. Briefly stated, the facts of the case are that a search and seizure, and survey operation u/s 132/133A of the Income-tax Act, 1961 [the Act, for s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year in accordance with, and subject to the provisions of, this Act in respect of the total income of the previous year of every individual, Hindu undivided family, company and local authority, and of every firm and other association of persons or the partners of the firm or the members of the association individually." 9. From the above, it is clear that in so far as Income tax assessments are concerned, a 'partnership firm' and a 'partner' are distinct entities, which means that any document found from the business premises of a partnership firm cannot, ipso facto, mean that the same was found from the possession of a partner. 10. There is no dispute that the impugned document, around which the quarrel revolves, was found from the business premises of the firm M/s Punihani International. 11. A reverse situation was considered by the Hon'ble Bombay High Court in the case of Tirupati Oil Corporation 248 ITR 194 wherein the quarrel was in respect of undisclosed income of a partner treated as undisclosed income of the firm and the Hon'ble Bombay High Court held as under: "The short point which arises for consideration in the present matter is whether the -undisclos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rge of all our respective claims and demand for relinquishing our shares as mentioned above. Signed Mr. Tarlok Singh Punihani Ms. Jaswani Kaur [Mother] Ms. Saloni Punihani [Wife] Ms. Sumeet Oberai [Daughter] Ms. Simmarjeet Punihani [Daughter] Ms. Jasmine Punihani [Daughter] Witness." 13. The bone of contention is that the alleged payment of Rs. 6.50 crores in cash, with the two payments made by cheques were found to be reflected in the bank statement and the Assessing Officer/ld. CIT(A) presumed that the payment of Rs. 6.50 crores in cash was also made by the assessee for effecting the relinquishment of 50% of shares in the Farm House situated at F-5, Radhey Mohan Drive, Gadaipur, Meharauli. 14. The above document is unsigned and it can be seen that there are four legal heirs of the deceased Late Shri Kulbir Singh Punihani. Most surprisingly, none of the legal heirs have been examined by the Assessing Officer in respect of the alleged receipt of Rs. 6.50 crores by them for the alleged relinquishment of shares in the said Farm House. 15. We have given thoughtful consideration to the assessment order but fail to find any reference to any partnership deed of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the demise of my husband Shri Kulbir Singh Punihani his outstanding capital balance in the books of M/s. Punihani International was transferred to my loan account which was repaid by M/s. Punihani International over the period of time. 5. Subsequently, I approached Shri Tarlok Singh Punihani and Shri Narinder Singh Punihani for financial assistance and assured them I have no objection if the property at F-5 Radhey Mohan Drive, Bandh Road, Gadaipur, Mehrauli is sold by M/s. Punihani International. Shri Tarlok Singh Punihani and Shri Narinder Singh Punihani agreed to my proposal and advanced unsecured loans to me in their individual capacities through proper banking channel as per my needs. A statement showing details of funds advanced by Shri Tarlok Singh Punihani and Shri Narinder Singh Punihani to me is as under: 6. Neither Shri Tarlok Singh nor Shri Narinder Singh ever advanced any sum to Smt. Saloni Punihani in cash. 7. As at 31 -03-2019 I owe a sum of Rs. 2,73,69,442/- to Shri Tarlok Singh Punihani. 8. As at 31 -03-2019 I owe a sum of Rs. 73,26,123/- to Shri Narinder Singh Punihani. VERIFICATION I, the above-named deponent do hereby verify that the contents of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 31-12-2013 to the said memorandum of family arrangement was executed for removal of inconsistencies in the stated memorandum of family arrangement. 4. After the demise of my brother Kulbir Singh Punihani his outstanding capital balance in the books of M/s. Punihani International was transferred to Smt. Saloni Punihani's loan account which was repaid by M/s. Punihani International over the period of time. 5. Subsequently, Smt. Saloni Punihani approached me and my brother Shri Narinder Singh Punihani for financial assistance and assured us that she has no objection if the property at F-5 Radhey Mohan Drive, Bandh Road, Gadaipur, Mehrauli is sold by Ms. Punihani International. We agreed to the proposal of Smt. Saloni Punihani, I and my brother Shri Narinder Singh Punihani in our individual capacities advanced unsecured loans to Smt. Saloni Punihani through proper banking channel as per her needs. A statement showing details of funds advanced by me to Smt. Saloni Punihani and the repayments received from her is as under 6. I and my brothers Shri Narinder Singh Punihani and Shri Amarjeet Singh Punihani acquired property at F-5 Radhey Mohan Drive, Bandh Road, Gadaipur, Mehrau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts, the impugned additions do not have any legs to stand on. 26. The above mentioned facts can be looked upon from another legal angle. The undisputed fact is that the alleged documents were found from the business premises of the partnership firm M/s Punihani International. Assessments of the assessee are unabated assessments on the date of search, which means that the ratio laid down by the Hon'ble Delhi High Court in the case of Kabul Chawla in 380 ITR 573 and Meeta Gutgutia Prop. M/s. Ferns N Petals in ITA No.306 to 308/2017 dated 25.05.2017 squarely apply. The relevant findings of the Hon'ble High Court read as under: "37. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: i. Once a search takes place under Section 132 of the Act, notice under Section 153 A (1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous year relevant to the AY in which the search takes place. ii. Assessments and reassessments pending on the date of the sear ..... X X X X Extracts X X X X X X X X Extracts X X X X
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