Braja Kishore Jena, Cuttack V. CIT, Cuttack

ITA 221/CTK/2014

• Counselvise Citation: 22122114 RSA 2014
• Duration Of Justice: 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 30-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RABIN CHOUDHURI
• Assessee Lawyers: B K MOHAPATRA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH , CUTTACK BEFORE S/SHRI P.K.BANSAL (AM) AND D.T.GARASIA (JM) I.T.A. NO. 221/CTK/2014 ASSESSMENT YEAR:2009-2010 M/S. BRAJA KISHORE JENA, PANASPUR, PO: BALICHANDRAPUR, MAHANGA, CUTTACK PA NO.AAHFB 6200 E VS ITO, WARD - 1(1), CUTTACK APPELLANT RESPONDENT FOR THE APPELLANT: SHRI B.K.MOHAPATRA FOR THE RESPONDENT: SHRI RABIN CHOUDHURI DATE OF HEARING: 05/02/2015 DATE OF PRONOUNCEMENT: 3/ 3 /2015 ORDER PER P.K.BANSAL, AM THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST ORDER DATED 28.3.2014 OF LD CIT, CUTTACK U/S.263 OF THE INCOME TAX ACT, 1961 FOR THE ASSESSMENT YEAR 2009-2010. 2. FACTS IN BRIEF ARE THAT THE LD CIT, AFTER CALLIN G FOR THE RECORD, NOTED THAT THE ASSESSEE FIRM DERIVED INCOME FROM SALE OF INDIAN MADE FOREIG N LIQUOR(IMFL). THE FIRM FILED A PARTNERSHIP DEED RECONSTITUTED ON 1.4.2008 HAVING 6 PARTNERS. IT WAS NOTED THAT SHRI BRAJA KISHORE JENA IS ONE OF THE PARTNER OF THE FIRM WHO HAS THE LICENSE OF IMFL IN HIS NAME. PURCHASE INVOICES ARE IN THE NAME OF SRI BRAJA KISH ORE JENA. LD CIT WAS THEREFORE, OF THE OPINION THAT THE PARTNERSHIP IS NOT GENUINE AND TH E ASSESSEE HAS TO BE ASSESSED AS AN AOP AND ONCE THE ASSESSEE IS TO BE ASSESSED AS AOP, IN VIEW OF SECTION 184(5), SALARY TO PARTNERS AND INTEREST ON CAPITAL ARE NOT TO BE ALLOWED. LD CIT, THEREFORE, AFTER ISSUING NOTICE TO THE ASSESSEE SET ASIDE THE ASSESSMENT ORDER AND DIRECTED THE ASS ESSING OFFICER FOR FRESH ADJUDICATION OF FACTS AND PROPER APPLICATION OF LAW IN FRESH ASSESSMENT P ROCEEDINGS AFTER GIVING PROPER OPPORTUNITIES TO THE ASSESSEE. 2 I.T.A. NO. 221/CTK/2014 ASSESSMENT YEAR:2009-2010 3. AFTER HEARING THE RIVAL SUBMISSIONS AND GOING TH ROUGH THE ORDERS OF THE TAX AUTHORITIES, WE NOTED THAT THE HONBLE ORISSA HIGH COURT IN THE CASE OF CIT VS. CIT VS. WINE CHAMBER (1992) 101 CTR (ORI) 287 HAS HELD DOWN THAT WHERE L ICENCE FOR TRADING IN LIQUOR STOOD IN THE NAMES OF ONLY SOME OF THE PARTNERS OF FIRM AND LICE NCE WAS NOT TRANSFERRED TO THE FIRM, THERE WAS NO ILLEGALITY IN PARTNERSHIP. IN VIEW OF THESE FINDINGS OF THE HONBLE JURISDICTIONAL HIGH COURT, IT IS SETTLED LAW THAT THE PARTNERSHIP FIRM CANNOT BE REGARDED TO BE AN ASSOCIATION OF PERSON. THEREFORE, IT CANNOT BE SAID THAT THERE IS AN ERROR IN THE ORDER PASSED BY THE AO BY TAKING THE VIEW THAT THE PARTNERSHIP IS GENUINE AND THE PROVISIONS OF SECTION 40(B) ARE APPLICABLE IN THE CASE OF THE ASSESSEE. IT IS A SE TTLED LAW THAT BY INVOKING THE JURISDICTION U/S.263 OF THE ACT, BOTH THE CONDITIONS THAT THE OR DER OF THE AO IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE MUST BE SATISFIED. SI NCE THE HONBLE JURISDICTIONAL HIGH COURT HAS TAKEN A VIEW IN FAVOUR OF THE ASSESSEE AND THE VIEW WHICH HAS BEEN TAKEN BY THE AO IN THE ASSESSMENT PASSED IN RESPECT OF WHICH THE PROCEEDIN GS U/S.263 HAS BEEN INITIATED BY LD CIT, IT CANNOT BE SAID THAT THE ORDER PASSED BY THE AO WAS ERRONEOUS. THUS IT IS PROVED THAT BOTH THE CONDITIONS AS ARE NECESSARY FOR INVOKING JURISDICTI ON U/S.263 ARE NOT COMPLIED WITH. WE, THEREFORE, QUASH THE ORDER PASSED U/S.263 OF THE AC T. 4. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN PURSUANCE WITH RULE 34(4) BY P UTTING THE COPY OF THE SAME ON NOTICE BOARD ON 3/3/2015. SD/- SD/- (D.T.GARASIA) (P.K.BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED, CUTTACK 3 / 3 /2015 B.K.PARIDA, SR. PS COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT: M/S. BRAJA KISHORE JENA, PANASPUR, P O: BALICHANDRAPUR, MAHANGA, CUTTACK 2. THE RESPONDENT: ITO, WARD-1(1), CUTTACK 3. THE CIT, CUTTACK 4. THE CIT(A),CUTTACK 5. DR, CUTTACK BENCH 6. GUARD FILE. TRUE COPY// BY ORDER ASST. REGISTRAR, ITAT, CUTTACK 3 I.T.A. NO. 221/CTK/2014 ASSESSMENT YEAR:2009-2010