9911796707
TMI Blog2014 (8) TMI 1253X X X X Extracts X X X X X X X X Extracts X X X X ..... of convenience and brevity. 2. The sole grievance of the assessee relates to the addition of Rs. 20 crores on account of sale consideration. ITA No. 843/M/2014 - A.Y. 2007-08 3. The assessee firm was constituted on 19.3.2006 with 5 partners. A search and seizure operation was conducted at the residential premises of one of the partners namely Shri Gangadhar Shetty. During the course of the search proceedings a MOU dt. 8.3.2007 was found with respect to sale of one SRA project to Salasar Dwellers Pvt. Ltd. In the said MOU, the sale consideration was stated at Rs. 20 crores. As per the said MOU, Shri Divakar Shetty has acknowledged the receiving of Rs. 90 lakhs as a partner of the assessee. The Assessing Officer found that the assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y this, the assessee is before us. The Ld. Counsel for the assessee reiterated what has been submitted before the lower authorities. 6. The Ld. Departmental Representative supported the findings of the Revenue authorities. 7. We have carefully perused the orders of the authorities below and the relevant material evidence brought on record before us. The assessee firm was constituted vide partnership Deed dt. 11.3.2006. The MOU found at the time of search is dt. 8.3.2007 which was between the assessee and M/s. Salasar Dwellers Pvt. Ltd. The certificate of incorporation from the Registrar of Companies shows that M/s. Salasar Dwellers Pvt. Ltd. came into existence on 29.3.2007. Being a legal person, a limited liability company is born on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... residential premises of Gangadhar Shetty. This MOU has elaborately been discussed by us in ITA No. 843/M/2014. Continuing the findings given in the assessment year 2007-08, the AO observed that the Agreement for Sale was executed on 16.4.2007 for Rs. 8.50 crores. After deducting the cost, the AO arrived at the profit of Rs. 6,73,45,900/- and completed the assessment on this income. 9. The assessee carried the matter before the Ld. CIT(A). It was strongly contended before the Ld. CIT(A) that as per the development agreement dt. 26.4.2007, the assessee was required to make out marketable title of the property and the developer's area free from all encumbrances, doubts, claims. It was further explained that the assessee was required to compl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eged by the AO. 12. Per contra, the Ld. DR supported the findings of the lower authorities. 13. We have carefully perused the orders of the authorities below and the relevant documentary evidences brought on record before us. The impugned agreement for development is dt. 26.4.2007. It is an undisputed fact that the assessee firm was dissolved on 14.5.2007. A perusal of the deed of dissolution dt. 14.5.2007 shows that Shri Divakar Shetty has agreed to take over all the assets and liabilities of the firm including exclusive right in the property. It is also provided in the Deed of dissolution that Shri Divakar Shetty shall have exclusive right to develop the said property and shall take over the partnership. A perusal of the agreement for d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when this amount has not been shown as income subsequently by the partner who has taken over the business of the dissolved firm. Therefore, in the interest of justice, we restore this issue to the files of the AO for the limited purpose of verification of Rs. 50 lakhs, whether this income has been shown by the partner who has taken over the business of the assessee firm and if it is taxed in the hands of the partner, then the same cannot be taxed in the hands of the firm. In respect of the balance addition of Rs. 6,23,45,900/-, we do not find any evidence to justify this addition which is accordingly deleted. 14. In the result, the appeal filed by the assessee in ITA No. 843/M/14 is allowed and the appeal filed by the assessee in ITA No. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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