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TMI Blog2024 (10) TMI 1288X X X X Extracts X X X X X X X X Extracts X X X X ..... in larger public interest? HELD THAT:- As per the findings given by the CIT (A) and reproduced by the ITAT which remained uncontroverted by the Revenue, even in respect of some of the syndicates, separate assessments have already been framed by the various AO u/s. 144/153C r.w.s. 153A of the Act and while making assessments in the hands of such syndicates, the amount of undisclosed income earned by these syndicates, have already been determined. It is also pertinent to mention that it is a well settled legal position that as per clause (a) of proviso to section 86 of the Act r.w.s 67A of the Act, if the assessee is a member in AOP/BOI and income earned from such AOP/BOI have been offered to tax, then, the share received by the assessee from such AOP/BOI after payment of due taxes cannot be taxed again in the hands of the recipient assessee. CIT (A) as well as the ITAT referred to the legal position rendered in the case of ITO vs. Ch. Achatalya [ 1995 (12) TMI 1 - SUPREME COURT] and took the view that the income derived by various syndicates in which the assessee was found one of the members, was required to be assessed in the hands of such syndicates only and a direct assessment in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid to be erroneous and prejudicial to the interest of revenue. Thus, present set of cases does not involve any substantial question of law so as to meet the provisions of Section 260-A of the Act for admitting these appeals. - HON'BLE SHRI JUSTICE SUSHRUT ARVIND DHARMADHIKARI HON'BLE SMT. JUSTICE ANURADHA SHUKLA Appearance : For the Appellant: Shri Siddharth Sharma-Advocate. For the Respondent: Shri Vashistha Narayan Dubey-Advocate. JUDGMENT PER: JUSTICE SUSHRUT ARVIND DHARMADHIKARI Heard on I.A.Nos.14638/2022, 14551/2022, 14523/2022, 14665/2022, 14641/2022, 14405/2022, 12607/2023, 14412/2022, 14629/2022, 14414/2022, 14401/2022, 14404/2022, 14408/2022, 14409/2022 and 14406/2022, applications under Section 5 of the Limitation Act for condonation of delay in respective appeals. For the reasons stated in these appeals, the aforesaid I.As are allowed and the delay caused in filing the appeals are hereby condoned. With the consent of learned counsel for the parties, the appeals are finally heard. 2. Learned counsel for the appellants has submitted that some of the appeals have been admitted on the substantial questions of law and some of the appeals have not been admitted, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the various years under Section 139 of the Act of 1961. Search and seizure operations under Section 132 of the Act was carried out at various premises of Shivhare group and the assessee on 07.01.2016. Consequently, notices under Section 153A of the Act was issued to the assessee for Assessment Year 2010-11 to Assessment Year 2015-16 on 27.10.2016. In response to the above notices, the assessee filed returns of income for Assessment Years 2010-11 to 2015-16 on various dates. The assessee filed regular return of income for Assessment Year 2016-17 on 31.03.2017 declaring income of Rs. 98,89,480/-. 6. The only issue that was argued by the appellant Revenue counsel before us that as to whether, the ITAT had erred in deleting the additions (of various amounts in other connected appeals) made by the Assessing Officer on the ground of appellant s share in profit derived by various syndicates maintaining that share of profit is taxable in the hands of syndicate and not in the hands of the assessee as per the extant provisions of the Income Tax Act, 1961. 7. Heard learned counsel for the parties. In short, the question that arises for consideration in these appeals are whether these app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ociation of Persons (AOP) or Body of Individuals (BOI) which are separately and specifically included in the definition of the expression Person as prescribed in section 2 (31) of the Act. According to CIT (A), such syndicates are a separate taxable legal entity and separately charged to tax U/s 4 of the Act at the maximum marginal rate (MMR). The CIT (A) further held that income derived by various syndicates, in which the assessee was one of the members, was required to be assessed in the hands of syndicates only and the direct assessment in the hands of the assessee could not have been made in respect of income derived by syndicates. The CIT (A) also held that even the question of admissibility or inadmissibility of any expenditure could have been raised in the assessments of syndicates. The CIT (A) further held that the assessee could have, at the best, been assessed in respect of his share in income of such syndicates but even that could not be taxed due to the specific provision of section 86 of the Act, which provides that Income-Tax shall not be payable by the assessee in respect of his share in the income of Association of Persons or Body of Individuals for the reason that, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of section 67A, in view of the specific provisions of section 86, such share of income shall be excluded from the total income of the assessee. We find that there are only two exceptions to the applicability of the provisions of section 86 viz. (i) when the association or body is not chargeable to tax on its total income at the maximum marginal rate or any higher rate; and (ii) where no income-tax is chargeable on the total income of the association or body, but, for the reasons discussed herein below, none of the exceptions to section 86 are applicable in the present case. 8.3.3 We further find that in the instant case, as per the findings given by the AO himself, the share of the assessee as a member of the syndicates (AOPs) was determinate and therefore, the assessee s case would not fall under the provisions of sub-section (1) to section 167B of the Act. On the other hand, the case of the assessee would fall under the provisions of sub-section (2) to section 167B of the Act. In such a situation, the entire income of the syndicates, of which the assessee was found to be a member, would be chargeable to maximum marginal rate in accordance with clause (i) of subsection (2) to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was claimed by the assessee himself, and therefore, any disallowance for claim of any such expenses can only be made in the hands of the syndicates which have actually incurred such expenditure. In our view, after making such additions on account of disallowances of expenses, the income of the syndicates ought to have been computed in accordance with the various provisions of the Act and once such income of the syndicate was computed, for the purpose of section 67A, the resultant share of income of the assessee in the total income of the syndicates was required to be apportioned. Thus, any share of the assessee in the inadmissible expenses of the syndicates ought to have been taken as in the nature of share of profit and that was required to be added under section 67A of the Act, but again, after making such addition, the necessary relief in accordance with the provisions of section 86 ought to have been granted by the AO to the assessee which has not been so done in the instant case. 8.3.7 In our view, even if for any reason the Revenue failed to make any assessment in the hands of the syndicates, then also the income, which is otherwise chargeable to tax in a different tax entit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer on the grounds of assesses share in profit derived by various syndicates maintaining that share of profit is taxable in the hands of syndicate and not in the hands of the assessee as per the existing provisions of the Income Tax Act, 1961. 16. Before dealing with the aforesaid controversy, it would be expedient to refer to Section 86 and Section 67A of the Act of 1961. The provisions, relevant for our purpose, read thus :- [Method of computing a member s share in income of association of persons or body of individuals. 67A. (1) In computing the total income of an assessee who is a member of an association of persons or a body of individuals wherein the shares of the members are determinate and known [other than a company or a cooperative society or a society registered under the Societies Registration Act, 1860 (21 of 1860), or under any law corresponding to that Act in force in any part of India], whether the net result of the computation of the total income of such association or body is a profit or a loss, his share (whether a net profit or net loss) shall be computed as follows, namely : (a) any interest, salary, bonus, commission or remuneration by whatever ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m marginal rate or any higher rate under any of the provisions of this Act, the share of a member computed as aforesaid shall not be included in his total income; (b) in any other case, the share of a member computed as aforesaid shall form part of his total income : Provided further that where no income-tax is chargeable on the total income of the association or body, the share of a member computed as aforesaid shall be chargeable to tax as part of his total income and nothing contained in this section shall apply to the case.] 17. We find that, as per the findings given by the CIT (A) at para (4.7.6) and reproduced by the ITAT in para (8.3.5) which remained uncontroverted by the Revenue, even in respect of some of the syndicates, separate assessments have already been framed by the various assessing officers u/s. 144/153C r.w.s. 153A of the Act and while making assessments in the hands of such syndicates, the amount of undisclosed income earned by these syndicates, have already been determined. 18. Besides the above findings, it is also pertinent to mention that it is a well settled legal position that as per clause (a) of proviso to section 86 of the Act r.w.s 67A of the Act, if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and has passed a well reasoned and speaking order taking into consideration all the material available on record. 24. The Tribunal being a final fact finding authority, in the absence of demonstrated perversity in its finding, interference with the concurrent findings of the CIT (A) as well as the ITAT therewith by this Court is not warranted. 25. For the aforesaid reasons, we have no hesitation in holding that no question of law, more so a substantial one, arises from the order of the Tribunal requiring consideration of this court. There is no merit in these appeals as the Tribunal has not committed any error in deleting the additions which was made by the Assessing Officer as the same cannot be said to be erroneous and prejudicial to the interest of revenue. Thus, in our opinion, the present set of cases does not involve any substantial question of law so as to meet the provisions of Section 260-A of the Act for admitting these appeals. 26. In view of the aforesaid discussion, we do not find any merit in these appeals, which in our opinion, deserves to be and are hereby dismissed in limine. 27. Let a copy of this judgment be kept in the record of all connected appeals. - - T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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