Royal Times Traders ITA 220/2012 09-08-2012
Assessee firm had offered explanation regarding capital introduced by partners before AO being amount introduced in cash from various sources. Order under s. 263 was held bad in law.
Decisions relied:
i) C.I.T. vs. Metal & Metal of India (2007) 208 CTR 457 (P&H)
ii) C.I.T. vs. Burma Electro Corporation (2001) 252 ITR 344 (P&H).
iii) C.I.T. vs. Rameshwar Dass Suresh Pal Cheeka (2007) 208 CTR459 (P&H)
where it has been held that partners having admitted of making the deposit with the assessee-firm, even if the claim of gift received by such partners is rejected, it is the partner who is liable to be taxed by treating the said amount as undisclosed income and firm cannot be subjected to tax on that ground.
Section 263 of the Act, does not visualize substitution of judgment of CIT for that of the AO, unless the decision is held to be erroneous and order is erroneous when it is not in accordance with law and is prejudicial when it has caused loss to the Revenue. The Ld. counsel for the assessee, relied upon the decision of Hon’ble Bombay High Court in the case of CIT vs. Gabrial India Ltd. 203 ITR 108 (Bom.), decision of ITAT Delhi Bench in the case of Jagjit Industries vs. ACIT (1997) 60 ITD (Del) 295 and decision of Hon’ble Gujarat High Court in the case of CIT vs. Arvind Jewellers (2003) 259 ITR
502 (Gu).
Assessee firm had offered explanation regarding capital introduced by partners before AO being amount introduced in cash from various sources. Order under s. 263 was held bad in law.
Decisions relied:
i) C.I.T. vs. Metal & Metal of India (2007) 208 CTR 457 (P&H)
ii) C.I.T. vs. Burma Electro Corporation (2001) 252 ITR 344 (P&H).
iii) C.I.T. vs. Rameshwar Dass Suresh Pal Cheeka (2007) 208 CTR459 (P&H)
where it has been held that partners having admitted of making the deposit with the assessee-firm, even if the claim of gift received by such partners is rejected, it is the partner who is liable to be taxed by treating the said amount as undisclosed income and firm cannot be subjected to tax on that ground.
Section 263 of the Act, does not visualize substitution of judgment of CIT for that of the AO, unless the decision is held to be erroneous and order is erroneous when it is not in accordance with law and is prejudicial when it has caused loss to the Revenue. The Ld. counsel for the assessee, relied upon the decision of Hon’ble Bombay High Court in the case of CIT vs. Gabrial India Ltd. 203 ITR 108 (Bom.), decision of ITAT Delhi Bench in the case of Jagjit Industries vs. ACIT (1997) 60 ITD (Del) 295 and decision of Hon’ble Gujarat High Court in the case of CIT vs. Arvind Jewellers (2003) 259 ITR
502 (Gu).
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