M/s.Tristar Investments, Bangalore V. The ACIT, Calicut

ITA 280/COCH/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 8426 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2016
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 15-06-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 18-05-2015
• Court: TRIBUNAL
• Department Lawyers: A DHANARAJ
• Assessee Lawyers: A C SURESH MUTHUKRISHNAN
• Keywords: Question of law; Reason to believe; Reassessment proceedings
• Section: 148

Judgement Text

ITA NOS.280-284/COCH/2015 1 , , , , IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN . . , ., !' !' !' !' BEFORE S/SHRI B. P. JAIN, AM & GEORGE GEORGE K., JM # # # # ./ I.TA NOS.280-284/COCH/2015 ( $% & /ASSESSMENT YEARS : 2006-07-2010-11) M/S. TRISTAR INVESTMENTS, 47/45, 5 TH FLOOR, BANGALORE CENTRAL MALL, RESIDENCY ROAD, BANGALORE-560 002. VS THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-2, KOZHIKODE. ( '( '( '( '( /ASSESSEE APPELLANT) ( ) )) ) * * * * '( '('( '( /REVENUE -RESPONDENT) ' . . # ./PAN NO. AAEFT 2588P '( + , /ASSESSEE BY SHRI A.C. SURESH MUTHUKRISHNAN, CA ) * '( + , /REVENUE BY SHRI A. DHANARAJ, SR. DR -. + /0 / DATE OF HEARING 15/06/2016 1 & + /0 /DATE OF PRONOUNCEMENT 25/07/2016 2 2 2 2 /ORDER PER BENCH THE ASSESSEE HAS FILED FIVE APPEALS IN TOTAL, FOR T HE ASSESSMENT YEARS 2006- 07 TO 2010-11 ARISING OUT OF LD. CIT(A)-IVS, KOCHI ORDER EACH DATED 02-03-2015, WHEREIN IT HAS RAISED THE FOLLOWING LEGAL ISSUES:- 1. JURISDICTION OF THE LEARNED ASSESSING OFFICER AT CA LICUT. ITA NOS.280-284/COCH/2015 2 2. VALIDITY OF THE RE-OPENING OF THE ASSESSMENT FOR TH E ASSESSMENT YEARS 2006-07 TO 2009-10. 3. STATUS OF THE ASSESSEE. ASSMT. YEARS 2006-07 TO 2009-10. JURISDICTION OF THE ASSESSING OFFICER AT CALICUT:- 2. THE FIRST SUBMISSION OF THE ASSESSEE RELATES T O THE ASSUMPTION OF JURISDICTION OF THE LEARNED ASSESSING OFFICER AT CALICUT OVER THE C ASE OF THE ASSESSEE. IT WAS SUBMITTED THAT THE ASSESSEE IS A PARTNERSHIP FIRM R EGISTERED AT BANGALORE AND HAD ALSO BEEN CARRYING ON BUSINESS AT BANGALORE. PU RSUANT TO THE SEARCH CONDUCTED BY THE DEPARTMENT IN THE CASE OF SRI K A RAUF AT CALICUT, CERTAIN DOCUMENTS RELATING TO THE ASSESSEE FIRM WERE FOUND AND SEIZED. IT WAS STATED THAT PERHAPS DUE TO THE SAID SEARCH OPERATION, THE LEARNED ASSESSING OFFICER AT CALICUT ISSUED THE NOTICE U/S. 148 OF THE ACT TO TH E ASSESSEE. 3.IT WAS SUBMITTED BY THE LEARNED AR THAT THE ASSES SEE WAS BORNE ON THE RECORDS OF THE ITO, WARD-1(1), BANGALORE, AND HAS FILED IT S RETURN OF INCOME AT BANGALORE WITHIN THE TIME ALLOWED, FOR THE ASSESSMENT YEAR 20 06-07. IT WAS SUBMITTED THAT THE ASSESSEE HAS NOT BEEN FURNISHED WITH THE COPY O F THE ORDER TRANSFERRING THE CASE OF THE ASSESSEE FROM THE ITO, W 1(1), BANGALOR E, TO THE ACIT, CENTRAL CIRCLE- 2, CALICUT. IT WAS FURTHER ARGUED THAT THE JURISDI CTION OVER THE CASE OF THE ASSESSEE HAS BEEN TRANSFERRED FROM ONE CITY TO ANOT HER CITY IN A DIFFERENT STATE. IT WAS ALSO THE SUBMISSION OF THE LEARNED AR THAT SECT ION 127 OF THE ACT PROVIDES THAT, NO ORDER OF TRANSFER CAN BE PASSED WITHOUT AF FORDING AN OPPORTUNITY TO THE ITA NOS.280-284/COCH/2015 3 ASSESSEE TO STATE ITS OBJECTION FOR THE PROPOSED TR ANSFER. THE LEARNED AR ALSO BROUGHT TO OUR ATTENTION THAT THE ASSESSING OFFICER ALSO CHOSE TO REMAIN SILENT OVER THE SPECIFIC OBJECTION RAISED BY THE ASSESSEE IN THIS REGARD BY ITS LETTER DATED 24/11/2011, A COPY OF WHICH HAD BEEN PLACED I N THE PAPER BOOK FILED BEFORE US. IT WAS ALSO STATED THAT AFTER CHOOSING TO REMAIN SILENT TO THE LETTER THUS FILED, THE ASSESSING OFFICER HAD THEN RECORDED IN T HE IMPUGNED ASSESSMENT ORDER THAT THE COMMISSIONER OF INCOME-TAX, BANGALORE-1, B ANGALORE HAS ASSIGNED THE JURISDICTION OF THE ASSESSEE TO THE ASSISTANT COMMI SSIONER OF INCOME-TAX, CENTRAL CIRCLE-2, KOZHIKODE VIDE ORDER NO. CENTRALIZATION/C IT-1/2009-10 DATED 3-3-2010. IT WAS THUS ARGUED THAT THE AFORESAID ACTION OF THE LEARNED ASSESSING OFFICER AS WELL AS OTHER AUTHORITIES ARE OPPOSED TO THE POSITI ON OF LAW AS HAS BEEN EXPLAINED BY THE HONBLE SUPREME COURT IN THE CASE OF AJANTHA INDUSTRIES REPORTED IN 102 ITR 281 (SC). 4. PER CONTRA, THE LEARNED DR CHOSE TO RELY ON THE ORD ERS OF THE AUTHORITIES BELOW AND ALSO SUBMITTED THAT THE ISSUE OF TRANSFER OF CASES WERE NOT APPEALABLE AND HENCE, NO MERIT COULD BE PLACED ON T HE ARGUMENTS MADE BY THE LD. AR. HE FURTHER SOUGHT TO ARGUE THAT THE OR DERS WERE MADE PURSUANT TO THE SEARCH IN THE CASE OF SRI K.A. RAUF WHEREIN DOC UMENTS OF THE ASSESSEE WERE FOUND AND THEY FORMED THE VERY BASIS OF THE ASSESSM ENTS THUS FRAMED. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND ALSO PERUSE D THE FACTS OF THE CASE. WE FIND THAT IN FACT THE ASSESSEE HAD CHALLE NGED THE JURISDICTION OF THE ITA NOS.280-284/COCH/2015 4 ASSESSING OFFICER BY CITING THAT THE MANDATORY OPPO RTUNITY OF BEING HEARD WAS NOT GRANTED TO THE ASSESSEE BEFORE THE ASSUMPTION O F JURISDICTION BY THE ASSESSING OFFICER. WE FURTHER OBSERVE THAT THE HON BLE SUPREME COURT IN THE CASE OF AJANTHA INDUSTRIES REPORTED IN 102 ITR 281 HAVE OBSERVED AS UNDER: THE REASON FOR RECORDING OF REASONS IN THE ORDER A ND MAKING THESE REASONS KNOWN TO THE ASSESSEE TO APPROACH THE HIGH COURT UNDER ITS WRIT JURISDICTION UNDER ARTICLE 226 OF T HIS CONSTITUTION OR EVEN THIS COURT UNDER ARTICLE 136 OF THE CONSTITUTI ON IN AN APPROPRIATE CASE FOR CHALLENGING THE ORDER, INTER A LIA, EITHER ON THE GROUND THAT IT IS MALAFIDE OR ARBITRARY OR THAT IT IS BASED ON IRRELEVANT AND EXTRANEOUS CONSIDERATIONS. WHETHER SUCH A WRIT OR SPECIAL LEAVE APPLICATION ULTIMATELY FAILS IS NOT R ELEVANT FOR A DECISION OF THE QUESTION. 6. WE FIND THAT THE AFORESAID FINDINGS OF THE HON BLE SUPREME COURT ARE VEY CLEAR AND THOUGH THERE COULD BE A MERIT FOUND IN TH E ARGUMENT THAT THE ASSESSEE OUGHT TO HAVE BEEN PROVIDED WITH THE ORDER S U/S. 127 OF THE ACT, THE ASSESSEE OUGHT TO HAVE AGITATED THIS ONLY UNDER THE WRIT JURISDICTION AND THE SAME WOULD NOT BE MAINTAINABLE BEFORE US. ACCORDING LY, THIS GROUND OF THE ASSESSEE IS DISMISSED. RE-OPENING OF ASSESSMENT:- 7. IT WAS SUBMITTED THAT THE ASSESSEE HAS CHALLENG ED THE IMPUGNED ORDER ON THE GROUND THAT THE RE-OPENING OF THE ASSESSMENT IS NOT IN ACCORDANCE WITH LAW. THE LD. AR SUBMITTED THAT THE ASSESSEE AFTER RECEIP T OF THE NOTICE U/S. 148 OF THE ACT DATED 31/03/2011, THE ASSESSEE AFTER HAVING FIL ED THE RETURN OF INCOME IN RESPONSE TO THE SAME HAD SOUGHT FOR THE COPY OF THE REASONS RECORDED WITH A ITA NOS.280-284/COCH/2015 5 VIEW TO FILE OBJECTIONS ON THE RE-OPENING IN ACCORD ANCE WITH THE LAW LAID DOWN BY THE HONBLE SUPREME COURT IN GKN DRIVESHAFTS (IN DIA) PVT. LTD. REPORTED IN 259 ITR 19. A COPY OF THE SAID LETTER HAS BEEN PLACED I N PAPER BOOK FILED BEFORE US. IT WAS THEN SUBMITTED THAT THE ASSESSING OFFICER DI D NOT FURNISH THE COPY OF THE REASONS RECORDED TO THE ASSESSEE IN COURSE OF ASSES SMENT PROCEEDINGS AND THUS IT WAS ARGUED THAT THE ACTION OF THE ASSESSING OFFI CER IN PASSING THE IMPUGNED ORDER WITHOUT GIVING THE COPY OF THE REASONS RECORD ED IN ACCORDANCE WITH THE JUDGMENT OF THE HONBLE SUPREME COURT IN GKN DRIVES HAFTS (INDIA) PVT. LTD. (SUPRA) RENDER THE IMPUGNED ORDER A NULLITY AND VOI D AB-INITIO. THE LD. AR SOUGHT TO PLACE RELIANCE FOR THIS PROPOSTION ON THE RATIO OF THE FOLLOWING DECISIONS:- 1. DECISION OF THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF TREND ELECTRONICS REPORTED IN 379 ITR 456. 2. DECISION OF THE HONBLE BOMBAY HIGH COURT IN TH E CASE OF VIDESH SANCHAR NIGAM LIMITED IN I.T.A. NO.4235 OF 2010. 3. DECISION OF THE ITAT, BANGALORE IN THE CASE OF SYNO PSYS INTERNATIONAL LTD. IN I.T.A. NO.549/B/11 DATED 10/1 2/2012. 4. DECISION OF THE ITAT, BANGALORE IN THE CASE OF K.V. VENKATASWAMY REDDY IN I.T.A. NO. 797,807,795,808/B/08 DATED 21/0 5/2010. 8. PER CONTRA, THE LD. DR SUBMITTED THAT THE ISSU ES ON WHICH THE REOPENING WERE RESORTED TO WERE SQUARELY CONFRONTED TO THE AS SESSEE AND THE ASSESSEE HAD ACTIVELY PARTICIPATED IN THE PROCEEDINGS BEFORE THE ASSESSING OFFICER. THE ITA NOS.280-284/COCH/2015 6 LD. DR ALSO SOUGHT TO PLACE RELIANCE ON THE PROVISI ONS OF SECTION 292BB OF THE ACT AND STATED THAT SINCE THE ASSESSEE HAD ACTIVELY PARTICIPATED IN THE PROCEEDINGS, IT WAS NOT OPEN FOR THE ASSESSEE TO NO W ARGUE THAT THE PROCEEDINGS WERE A NULLITY ON ACCOUNT OF NON FURNIS HING OF THE REASONS. 9. WE HAVE PERUSED THE ORDERS AND FACTS OF THE CAS E AND HEARD THE RIVAL CONTENTIONS. NOTICE DATED 31-03-2011 ISSUED U/S. 14 8 OF THE ACT HAS BEEN PLACED BY THE ASSESSEE IN THE PAPER BOOKS FILED BEF ORE US. THE ASSESSEE HAD BY VIRTUE OF ITS LETTER DATED 24-11-2011 REQUIRED THE ASSESSING OFFICER TO FURNISH THE REASONS FOR ISSUE OF SUCH NOTICE. SUCH LETTER WAS S UBMITTED DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS ITSELF. THOUGH IT MIGHT BE TRUE THAT THE ASSESSEE WOULD HAVE BEEN AWARE OF THE POSSIBILITY THAT THE N OTICES HAVE BEEN ISSUED PURSUANT TO THE SEIZURE OF CERTAIN PAPERS OF THE AS SESSEE IN THE PREMISES OF SRI K.A. RAUF DURING THE COURSE OF SEARCH, IT REMAINS A N UNCONTROVERTED FACT THAT THE ASSESSING OFFICER HAD NOT COMPLIED WITH THE LAW LAI D DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF GKN DRIVESHAFTS (INDIA ) LTD. (SUPRA). IN OUR OPINION AWARENESS OF THE ASSESSEE AS TO THE REASON WHY NOTI CE U/S. 148 OF THE ACT WAS ISSUED MAY NOT BE SUFFICIENT TO SATISFY THE REQUIRE MENT IN THIS REGARD. WE ARE FURTHER SUPPORTED BY THE FINDINGS AND CONCLUSION OF THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF TREND ELECTRONICS (SUPRA), WH EREIN IT WAS HELD AS UNDER: 6. A FURTHER APPEAL WAS PREFERRED BY THE RESPONDEN T TO THE TRIBUNAL. THE IMPUGNED ORDER OF THE TRIBUNAL RECOR DS THE ITA NOS.280-284/COCH/2015 7 UNDISPUTED FACT THAT THE RESPONDENT-ASSESSEE HAD SO UGHT FOR REASONS FOR REOPENING NOTICE DATED 26 MARCH 2010 FR OM THE ASSESSING OFFICER. THE REASONS WERE ADMITTEDLY NOT FURNISHED TO THE RESPONDENT-ASSESSEE BEFORE THE COMPLETION OF THE RE ASSESSMENT PROCEEDINGS. THE IMPUGNED ORDER PLACES RELIANCE UP ON THE DECISION OF APEX COURT IN GNK DRIVESHAFTS (INDIA) L TD. V. ITO (2003) 259 ITR 19/(2002) 125 TAXMAN 963 (SC) WHEREIN IT HAS BEEN SPECIFICALLY PROVIDED THAT THE ASSESSING OFFICER IS BOUND TO FURNISH REASONS FOR ISSUANCE OF REOPENING OF NOTICE WHEN SO UGHT FOR BY THE ASSESSEE. FURTHER, RELIANCE WAS PLACED UPON THE DECISION OF THIS COURT IN CIT V. VIDESH SANCHAR NIGAM LTD. (201 2) 340ITR 66 (BOM.) WHEREIN THIS COURT HAS HELD THAT FAILURE TO FURNISH THE RECORDED REASONS FOR ISSUE OF REOPENING NOTICES TO THE ASSESSEE BEFORE COMPLETION OF THE ASSESSMENT PROCEEDINGS WOU LD MAKE THE REASSESSMENT ORDER PASSED IN PURSUANCE OF SUCH A NOTICE BAD IN LAW. IN THE ABOVE CIRCUMSTANCES, THE APPEAL OF T HE RESPONDENT- ASSESSEE WAS ALLOWED BY THE TRIBUNAL. 7. MR. PINTO THE LEARNED COUNSEL FOR THE REVENUE SUBMI TS THAT THE RESPONDENT-AS HAD ONLY ASKED FOR REASONS ONCE AND D ID NOT FURTHER ASK FOR REASONS. FURTHER HE SUBMITS THAT A S THE RESPONDENTS- ASSESSEE HAD PARTICIPATED IN THE PROCEEDINGS BEFORE THE ASSESSING OFFICER, IT MUST BE IMPLIED THAT REASONS WERE FURNISHED. 8. WE FIND THAT THE IMPUGNED ORDER MERELY APPLIES THE DECISION OF THE APEX COURT IN GNK DRIVESHAFTS (INDIA) LTD. ( SUPRA). FURTHER IT ALSO FOLLOWS THE DECISION OF THIS COURT IN VIDESH S ANCHAR NIGAM LTD. (SUPRA) IN HOLDING THAT AN ORDER PASSED IN REASSESS MENT PROCEEDINGS ARE BAD IN LAW IN THE ABSENCE OF REASON S RECORDED FOR ISSUING A REOPENING NOTICE U/S. 148 OF THE ACT BEING FURNISHED TO THE ASSESSEE WHEN SOUGHT FOR. IT IS AXIOMATIC TH AT POWER TO REOPEN A COMPLETED ASSESSMENT UNDER THE ACT IS AN E XCEPTIONAL POWER AND WHENEVER REVENUE SEEKS TO EXERCISE SUCH P OWER, THEY MUST STRICTLY COMPLY WITH THE PREREQUISITE CONDITIO NS VIZ. REOPENING OF REASONS TO INDICATE THAT THE ASSESSING OFFICER H AD REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED A SSESSMENT WHICH WOULD WARRANT THE REOPENING OF AN ASSESSMENT. THESE RECORDED REASONS AS LAID DOWN BY THE APEX COURT MUS T BE FURNISHED TO THE ASSESSEE WHEN SOUGHT FOR SO AS TO ENABLE THE ASSESSEE TO OBJECT TO THE SAME BEFORE THE ASSESSING OFFICER. THUS IN THE ABSENCE OF REASONS BEING FURNISHED, WHEN SOU GHT FOR WOULD MAKE AN ORDER PASSED IN REASSESSMENT BAD IN LAW. T HE RECORDING OF REASONS (WHICH HAS BEEN DONE IN THIS CASE) AND F URNISHING OF THE ITA NOS.280-284/COCH/2015 8 SAME HAS TO BE STRICTLY COMPLIED WITH AS IT IS A JU RISDICTIONAL ISSUE. THIS REQUIREMENT IS VERY STATUTORY AS IT NOT ONLY E NSURES REOPENING NOTICES ARE NOT LIGHTLY ISSUED. BESIDES IN CASE TH E SAME HAVE BEEN ISSUED ON SOME MISUNDERSTANDING/MISCONCEPTION, THE ASSESSEE IS GIVEN AN OPPORTUNITY TO POINT OUT THAT THE REASONS TO BELIEVE AS RECORDED IN THE REASONS DO NOT WARRANT REOPENING BE FORE THE REASSESSMENT PROCEEDINGS ARE COMMENCED. THE ASSESS ING OFFICER DISPOSES OF THESE OBJECTIONS AND IF SATISFIED WITH THE OBJECTIONS, THEN THE IMPUGNED REOPENING NOTICE U/S. 148 OF THE ACT IS DROPPED/WITHDRAWN OTHERWISE IT IS PROCEEDED WITH FU RTHER. IN ISSUES SUCH AS THIS, I.E. WHERE JURISDICTIONAL AUTH ORITY CONCERNED AND NO QUESTION OF KNOWLEDGE BEING ATTRIBUTED ON TH E BASIS OF IMPLICATION CAN ARISE. WE ALSO DO NOT APPRECIATE TH E STAND OF THE REVENUE THAT THE RESPONDENT-ASSESSEE HAD ASKED FOR REASONS RECORDED ONLY ONCE AND THEREFORE SEEKING TO JUSTIFY NON FURNISHING OF REASONS. WE EXPECT THE STATE TO ACT MORE RESPON SIBLY. 9. IN VIEW OF THE FACT THAT THE ORDER OF THE TRIBU NAL HAS ONLY APPLIED THE SETTLED POSITION OF LAW IN ALLOWING THE RESPONDENT- ASSESSEES APPEAL, NO SUBSTANTIAL QUESTION OF LAW A RISES FOR OUR CONSIDERATION. 10. ACCORDINGLY, WE ARE CONSTRAINED TO QUASH THE ASSESSMENTS MADE ON THE ASSESSEE FOR THE IMPUGNED ASSESSMENT YEARS. SINCE, THESE APPEALS HAVE BEEN ALLOWED ON THE LEGAL GROUNDS ITSELF, THE OTHER GROU NDS RELATING TO THE MERITS OF THE ISSUES INVOLVED ARE NOT BEING DEALT WITH AND TH E ASSESSEES APPEALS FOR THE ASSESSMENT YEARS 2006-07 TO 2009-10 ARE TREATED AS ALLOWED. ASSESSMENT YEAR 2010-11 11. THE LEGAL ISSUES WHICH ARISE FOR OUR CONSIDERA TION FOR THE CAPTIONED ASSESSMENT YEAR ARE THAT OF JURISDICTION U/S. 127 O F THE ACT AND THE TREATMENT OF THE STATUS OF THE ASSESSEE AS AN AOP BY THE ASSESSI NG OFFICER AS AGAINST THE ITA NOS.280-284/COCH/2015 9 STATUS OF FIRM RETURNED BY THE ASSESSEE. IN VIEW OF OUR OBSERVATIONS SUPRA, WE ARE DISMISSING THE GROUND OF THE APPELLANT ON THE O BJECTION TO THE ASSUMPTION OF JURISDICTION BY THE ASSESSING OFFICER U/S. 127 OF T HE ACT. 12. COMING TO THE REMAINING GROUND ON THE STATUS O F THE APPELLANT, IT WAS SUBMITTED THAT THE LEARNED ASSESSING OFFICER HAS OB SERVED IN PAGE 2 OF THE ASSESSMENT ORDER THAT THE ASSESSEE IS A REGISTERED FIRM CONSTITUTED WITH EFFECT FROM 03/10/2004 CONSISTING OF THE FOLLOWING PARTNER S:- (1) SRI PAUL PERINCHERY (2) SRI THOMAS PERINCHERY (3) SRI K.R. SOORAJ (4) M/S. PANTEON INC HOWEVER, WHILE CONCLUDING THE ASSESSMENT, THE LEARN ED ASSESSING OFFICER ADOPTED THE STATUS OF THE ASSESSEE AS AN AOP IN THE IMPUGNED ORDER BY OBSERVING THAT THE ASSESSEE CANNOT BE A GENUINE FIR M ACCORDING TO THE KARNATAKA EXCISE ACT, SINCE THE ASSESSEE FIRM WAS C ARRYING ON THE BUSINESS ON THE STRENGTH OF THE BAR LICENSE ISSUED IN THE NAME OF SRI R. RAVINDRA SINGH AND SRI V. RAVIKUMAR WHO ARE NOT PARTNERS OF THE FIRM. 13. IT WAS ALSO SUBMITTED THAT THE VIEW TAKEN BY THE ASSESSING OFFICER IS ERRONEOUS IN LAW, SINCE UNDER THE AMENDED PROVISION S OF SEC. 184 OF THE ACT, A PARTNERSHIP FIRM IS TO BE ASSESSED AS SUCH, IF IT F ULFILS THE FOLLOWING TWO CONDITIONS:- ITA NOS.280-284/COCH/2015 10 (A) IT IS EVIDENCED BY AN INSTRUMENT OF PARTNERSHIP; (B) THE INDIVIDUAL SHARES OF THE PARTNERS ARE SPECIFIED IN THAT INSTRUMENT; THE COPIES OF THE PARTNERSHIP DEED AND THE CERTIFIC ATE OF REGISTRATION ISSUED BY THE REGISTRAR OF FIRMS WERE ALSO PLACED IN THE PAPE R BOOK. THE LD. AR SUBMITTED THAT THE ASSESSEE HAS COMPLIED WITH THE REQUIREMENT S OF SEC.184 OF THE ACT IN THE SENSE THAT, THERE IS A DEED OF PARTNERSHIP IN W HICH THE SHARES OF THE PARTNERS ARE MENTIONED. THE SAID DEED HAS ALSO BEEN FILED B EFORE THE LEARNED ASSESSING OFFICER AND HENCE, THERE IS NO VIOLATION OF THE PRO VISIONS OF SEC. 184 OF THE ACT. HENCE, THE PROVISIONS OF SECTION 185 OF THE ACT, IN VOKED BY THE LEARNED ASSESSING OFFICER ARE TOTALLY ERRONEOUS AND UNWARRANTED ON TH E FACTS OF THE ASSESSEES CASE. THE CORRECT STATUS TO BE ADOPTED WOULD BE ONL Y THAT OF FIRM. 14. THE LD. AR FURTHER SUBMITTED THAT THERE IS NO VIOLATION OF THE PROVISIONS OF KARNATAKA EXCISE ACT AS THE ASSESSEE IS NOT CLAIMIN G THAT THE LICENSE TO CARRY ON BAR BUSINESS IS TRANSFERRED TO IT AND SINCE THE ASS ESSEE HAS CARRIED ON BUSINESS ON THE STRENGTH OF THE LICENSE ISSUED IN THE NAME OF M R. RAVINDRA SINGH AND PER-SE, IT CANNOT BE CONSIDERED AS AN ILLEGAL FIRM ON THIS SCO RE. 15. THE LD. AR ALSO BROUGHT OUR ATTENTION TO THE A SSESSMENT ORDER FOR THE ASSESSMENT YEAR 2011-12, PLACED IN THE PAPER BOOK W HEREIN THE STATUS OF THE ASSESSEE AS A FIRM HAS BEEN ACCEPTED BY THE DEPARTM ENT AND NO DISALLOWANCE U/S. 185 OF THE ACT WAS MADE. IT WAS THUS ARGUED THAT THE ITA NOS.280-284/COCH/2015 11 DEPARTMENT COULD NOT BE ALLOWED TO TAKE TWO DIFFERE NT STANDS UNDER IDENTICAL FACTS AND HENCE, THE DISALLOWANCES OUGHT TO BE DELE TED. 16. PER CONTRA, THE LEARNED DR SOUGHT TO RELY ON THE ORDER OF THE CIT(A) AND STATED THAT THE ASSESSEE COULD NOT BE GRANTED THE S TATUS OF THE FIRM, SINCE MR. K.A. RAUFS NAME WAS NOT FOUND MENTIONED IN THE DEE D AND AS SUCH THE ASSESSEE COULD NOT HAVE BEEN STATED TO HAVE COMPLIE D THE REQUIREMENTS OF SECTION 184 OF THE ACT. 17. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND P ERUSED THE FACTS OF THE CASE AND THE ORDERS. WE ARE INCLINED TO ACCEPT THE ARGU MENTS OF THE LEARNED AR THAT THERE COULD BE NO TWO OPINIONS TAKEN BY THE DE PARTMENT UNDER SAME OR SIMILAR FACTS. IN THE CASE OF THE ASSESSEE, THE DEP ARTMENT HAVING NOW ACCEPTED THE STAND OF THE ASSESSEE OF ITS STATUS AS FIRM CO ULD NOT DENY THE SAME BENEFIT IN THE EARLIER YEARS. FURTHER, THE PROVISIONS OF SECT ION 184 ARE ALSO CLEAR THAT ONCE THE REQUIREMENTS MENTIONED THEREIN HAVE BEEN MET, N O FURTHER ENQUIRY IS NEEDED AND THE STATUS OF THE FIRM AS SUCH OUGHT TO BE ACCEPTED. FURTHER, THE ASSESSING OFFICER APART FROM MERELY STATING THAT TH E FIRM WOULD NOT BE CONSIDERED AS A GENUINE UNDER THE PROVISIONS OF THE KARNATAKA EXCISE ACT HAS NOT SUBSTANTIATED THE SAME IN THE ORDER OF ASSESSME NT PASSED BY HIM, LEADING TO THE CONCLUSION THAT THE SAME IS MERELY ON SUSPICION S. ACCORDINGLY, WE HOLD THAT THE ASSESSEE OUGHT TO BE ASSESSED AS A FIRM AND THE DISALLOWANCE MADE BY THE ITA NOS.280-284/COCH/2015 12 ASSESSING OFFICER ON THE INTEREST ON CAPITAL AND SA LARY PAID TO THE PARTNERS NEED TO BE DELETED. ACCORDINGLY, THE APPEAL OF THE ASSES SEE FOR THE ASSESSMENT YEAR 2010-11 AND IN OTHER YEARS ON THIS ISSUE ARE TREATE D AS ALLOWED. 18. IN THE RESULT, THE APPEALS OF THE ASSESSEE I N I.T.A. NOS. 280-284/COCH/2015 ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT O N 25-07-2016 SD/- SD/- . ) (GEORGE GEORGE K.) ( . . ) ( B.P. JAIN) /JUDICIAL MEMBER /ACCOUNTANT MEMBER ' /PLACE: /COCHIN 4 /DATED: 25 TH JULY, 2016 GJ/ 2 + )/5 65&/ /COPY TO: 1. '( /M/S. TRISTAR INVESTMENTS, 47/45, 5 TH FLOOR, BANGALORE CENTRAL MALL, RESIDENCY ROAD, BANGALORE-560 002. 2. )* '( /THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-2, KOZHIKODE. 3. -7 / ( )/THE COMMISSIONER OF INCOME-TAX(APPEALS)-IV, KOCHI . 4. -7 / /THE COMMISSIONER OF INCOME-TAX, CENTRAL, KOCHI. 5. 589 )/ , /THE DR/ITAT, COCHIN BENCH. 6. 9: ;. /GUARD FILE. ITA NOS.280-284/COCH/2015 13 2- /BY ORDER < /ASSISTANT REGISTRAR . . =0 . > . =0 ., /I.T.A.T., COCHIN