RITESH SHAH & OTHERS, MUMBAI V. ITO 15(1)(4), MUMBAI

ITA 4373/MUM/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8160 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 20-06-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: V C SHAH
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'SMC' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT ITA NO. 4373/MUM/2014 (ASSESSMENT YEAR: 2008-09) RITESH RAMESH SHAH & OTHERS VS. INCOME TAX OFFICER - 15(1)(4) 401, EARTH SAMMPANNA 198-200 KHETWADI MAIN ROAD 4TH FLOOR, MUMBAI 400004 1ST FLOOR, MATRU MANDIR TARDEO ROAD, MUMBAI 400007 PAN AAFFR3849D APPELLANT RESPONDENT ITA NO. 4374/MUM/2014 (ASSESSMENT YEAR: 2008-09) PRAFUL RAMESH SHAH & OTHERS VS. INCOME TAX OFFICER - 15(1)(4) 401, EARTH SAMMPANNA 198-200 KHETWADI MAIN ROAD 4TH FLOOR, MUMBAI 400004 1ST FLOOR, MATRU MANDIR TARDEO ROAD, MUMBAI 400007 PAN - AAFFP4957N APPELLANT RESPONDENT APPELLANT BY: SHRI V.C. SHAH RESPONDENT BY: MS. AMRITA SINGH DATE OF HEARING: 07.08.2014 DATE OF PRONOUNCEMENT: 30.09.2014 O R D E R PER D. MANMOHAN, V.P. THESE TWO APPEALS PERTAIN TO A.Y. 2008-09 AND THEY ARE DIRECTED AGAINST THE IDENTICAL ORDERS PASSED BY THE CIT(A) 26, MUMBAI. 2. IN THE CASE OF RITESH RAMESH SHAH & OTHERS THE ASSE SSEE RAISED THE FOLLOWING GROUND: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LEARNED CIT(A) ERRED IN DISMISSING THE APPEAL BY CO MING TO THE CONCLUSION THAT NO ERROR CAN BE SAID TO HAVE BEEN C OMPLETED BY THE ASSESSING OFFICER WHILE DETERMINING THE INCOME U/S 143(1) AT RS.4,90,000/- OF INCOME TAX ACT PARTICULARLY WHEN T HE RETURN OF INCOME WAS FILED MERELY TO INDICATE THE AMOUNT OF I NCOME TO BE COMPUTED OF COLLECTIVE CO-OWNERSHIP TO DETERMINE AL LOCABLE INCOME AMONGST RESPECTIVE CO-OWNERS/MEMBERS WHEREIN THE ITA NO. 4373 & 4374/MUM/2014 RITESH & PRAFUL RAMESH SHAHS & OTHRES 2 SHARES OF ALL MEMBERS OF AOP WERE DEFINITE AND DETE RMINATE AND THE INCOME FROM PROPERTY EARNED BY ALL JOINT CO-OWN ERS WAS TO BE TAXED MANDATORILY IN THE HANDS OF RESPECTIVE CO-OWN ERS AS PER PROVISIONS OF SECTION 26 OF THE I.T. ACT AND PARTIC ULARLY WHEN THE INCOME WAS ALSO OFFERED BY RESPECTIVE CO-OWNERS IN THEIR INDIVIDUAL RETURN OF INCOME. THE ACT OF CONFIRMING ASSESSMENT IN THE HANDS OF CO-OWNERSHIP WOULD AMOUNT TO DOUBLE TA XATION OF SAME INCOME. THE DIRECTIONS BE ISSUED TO TREAT THE INCOME OF AP PELLANT AS NIL AND THE LEARNED AO BE DIRECTED TO ISSUE THE REFUND OF TAX INCORRECTLY COLLECTED. IDENTICAL GROUND WAS RAISED IN THE CASE OF PRAFUL R AMESH SHAH & OTHERS AND AMOUNT INVOLVED THEREIN IS ` 3,76,340/-. 3. FACTS NECESSARY FOR DISPOSAL OF THE APPEALS ARE STA TED IN BRIEF. ACCORDING TO THE LEARNED COUNSEL FOR THE ASSESSEE A GROUP OF PEOPLE PURCHASED PROPERTY IN THE COMPLEX KNOWN AS SAI SHRA DHHA; 12 PERSONS, INCLUDING HUFS, PURCHASED B WING GROUND FLOOR POR TION OF SAI SHRADHHA AND AS PER THE AGREEMENT IT WAS TO BE ENJOYED AS CO -OWNERS AND IT WAS LET OUT. SHRI PRAFUL RAMESH SHAH AND SHRI RITESH RAMESH SHAH ARE CO-OWNERS IN THE SAID BUILDING. 4. SIMILARLY, ANOTHER SET OF 12 PERSONS, INCLUDING SOM E HUFS, HAVE JOINTLY PURCHASED THE PREMISES KNOWN AS C WING, GROUND FL OOR OF THE BUILDING SAI SHRADDHA. WITH REGARD TO THESE PROPERTIES THE CO-OW NERSHIP AGREEMENT WAS ENTERED INTO ON THE 1 ST DAY OF JULY, 1999 IN THE CASE OF C WING WHEREAS IN THE CASE OF B WING PROPERTY THE SO CALLED CO-OWNE RSHIP AGREEMENT WAS ENTERED ON THE 2 ND DAY OF MARCH, 2000. IN BOTH THE PROPERTIES SHRI PR AFUL RAMESH SHAH AND SHRI RITESH RAMESH SHAH ARE JOINT/C O-OWNERS. 5. IN THE NAME RITESH RAMESH SHAH & OTHERS AND PRAFUL RAMESH SHAH & OTHERS PAN CARD WAS SOUGHT TO BE OBTAINED. IN FOR M NO. 49A ONE HAS TO TICK MARK THE STATUS IN WHICH PAN CARD IS REQUIRED. FOR INDIVIDUAL THE 4 TH DIGIT OF THE PAN WILL REFLECT P, FOR HUF IT IS H , FOR COMPANY C, FOR FIRM F, FOR AOP A, FOR TRUST T. SIMILARLY BOI IS REFERRED TO AS B, LOCAL AUTHORITY AS L AND ARTIFICIAL JURIDICAL PERSON AS J. THE PARTIES HEREIN, THOUGH CLAIMED THEMSELVES AS CO-OWNERS, I.E. RIT ESH RAMESH SHAH & OTHERS AND PRAFUL RAMESH SHAH & OTHERS, THEY CLAIME D TO HAVE APPLIED FOR PAN IN THE NAME OF INDIVIDUAL. PRESUMING THAT OT HERS WOULD BE ABSENT IN ITA NO. 4373 & 4374/MUM/2014 RITESH & PRAFUL RAMESH SHAHS & OTHRES 3 THE CASE OF INDIVIDUALS, PAN WAS GIVEN IN THE NAME OF FIRMS. IT APPEARS THAT TAX IS DEDUCTED UNDER THE SAID PAN. THE PARTIES KEP T ON FILING RETURNS BY SHOWING THE STATUS AS INDIVIDUAL INSTEAD OF SHOWI NG IT AS EITHER AOP OR BOI. 6. FOR THE YEAR UNDER CONSIDERATION BOTH THE ASSESSEES HEREIN HAVE FILED RETURNS IN THE INDIVIDUAL STATUS WITH PA NUMBERS WH ICH ARE EARMARKED FOR FIRMS AND DECLARED TOTAL RENT RECEIVED. AS PER THE STATEMENT OF TOTAL INCOME THE NET TOTAL INCOME IS SHOWN AS NIL SINCE THE INCO ME WAS STATED TO HAVE BEEN ALLOCATED AMONGST THE CO-OWNERS AS PER THE PRO VISIONS OF SECTION 26 OF THE I.T. ACT. HOWEVER, AS PER THE NEW SYSTEM THE AS SESSEE CANNOT FILE THE STATEMENT OF TOTAL INCOME AND IN THE FORMS FILLED U P THROUGH INTERNET THE GROSS TOTAL INCOME WAS SHOWN BUT THE TAX PAYABLE TH EREON IS SHOWN AS NIL. WHILE PROCESSING THE RETURN UNDER SECTION 143(1) OF THE ACT THE AO NOTICED THAT THOUGH THE ASSESSEE HAS SHOWN TOTAL INCOME AT ` 4,90,000/- AND ` 3,76,338/- RESPECTIVELY, TAX PAYABLE WAS SHOWN AS N IL AND THEREFORE HE HAS ISSUED INTIMATION UNDER SECTION 143(1) WHEREIN THE TOTAL TAX PAYABLE ON THE INCOME RETURNED WAS DETERMINED. 7. AGGRIEVED, ASSESSEE CONTENDED BEFORE THE CIT(A) THA T IT IS A CO- OWNERSHIP DATED 1 ST JULY, 1999 AND LET OUT THE PREMISES JOINTLY AND THEREFORE THE INCOME FROM THE PROPERTY HAS TO BE IN CLUDED IN THE TOTAL INCOME OF RESPECTIVE CO-OWNERS UNDER SECTION 26 OF THE I.T. ACT. IT WAS ALSO STATED THAT THE RETURN OF INCOME SHOWING NIL INCOME WAS FILED BY THE CO- OWNERS COLLECTIVELY TO MEET THE LEGAL COMPLIANCE OF FILING RETURNS. THE RESPECTIVE CO-OWNERS HAVE FILED THEIR RETURNS OF IN COME SHOWING THEIR SHARE IN CO-OWNERSHIP INCOME. THE RETURNS OF INCOME IN TH ESE CASES WERE FILED FOR THE SAKE OF CONVENIENCE ONLY TO COMPLY WITH THE OBL IGATION. IT WAS ALSO CONTENDED THAT THE TOTAL INCOME IS TO BE ASSESSED A S NIL AS THERE CANNOT BE ANY DOUBLE TAXATION. 8. THE LEARNED CIT(A) OBSERVED THAT THE INCOME RETURNE D BY THE ASSESSEE HAS TO BE ACCEPTED BY THE AO WITH APPROPRIATE ADJUS TMENTS, UNDER SECTION 143(1), AND SINCE THERE IS NO TAX PAID THEREON, DEM AND WAS RAISED UNDER SECTION 143(1) OF THE ACT; NO ADJUSTMENT CAN BE MAD E IN THE RETURN FILED EXCEPT THE ADJUSTMENTS MENTIONED IN SECTION 143(1) OF THE ACT. ALLOCATION OF RENTAL INCOME AMONGST THE CO-OWNERS IS NOT ONE SUCH ADJUSTMENT THAT CAN ITA NO. 4373 & 4374/MUM/2014 RITESH & PRAFUL RAMESH SHAHS & OTHRES 4 BE MADE UNDER SECTION 143(1). THEREFORE NO ERROR IS STATED TO HAVE BEEN COMMITTED BY THE AO WHILE DETERMINING THE INCOME UN DER SECTION 143(1) OF THE ACT. HE ACCORDINGLY UPHELD THE PROCEDURE FOLLOW ED BY THE AO. 9. AGGRIEVED, ASSESSEES ARE IN APPEAL BEFORE THE TRIBU NAL. THE LEARNED COUNSEL FOR THE ASSESSEES SUBMITTED THAT THE ASSESS EES ARE GROUP OF INDIVIDUALS WHO HAVE COLLECTED RENT ON BEHALF OF T HE CO-OWNERS. SINCE THE CO-OWNERS HAVE BEEN INDIVIDUALLY ASSESSED TO TAX ON THEIR SHARE OF INCOME, BRINGING TO TAX THE SAME INCOME IN THE HANDS OF THE AOP/GROUP OF INDIVIDUALS WOULD AMOUNT TO DOUBLE TAXATION. THE LE ARNED COUNSEL ADVERTED THE ATTENTION OF THE BENCH TO PAGES 12 & 13 OF THE PAPER BOOK, I,E. CERTIFICATE BY RITESH RAMESH SHAH AND OTHERS TO SUBMIT THAT THE RE ARE 12 CO-OWNERS WHO HAVE COLLECTIVELY LET OUT THE PROPERTY BUT THE INCOME IS INCLUDIBLE IN THE TOTAL INCOME OF THE RESPECTIVE CO-OWNERS, UNDER SEC TION 26 OF THE INCOME TAX ACT, 1961, TO THE EXTENT OF THEIR SHARE IN THE INCO ME. IT WAS ALSO HIGHLIGHTED THAT THE CO-OWNERS HAVE ALREADY INCLUDED THEIR SHAR E OF INCOME IN THEIR RESPECTIVE RETURNS OF INCOME. 10. WHEN POINTED OUT THAT THE PRESENT ASSESSEES ARE ASS ESSED TO TAX AS INDIVIDUALS AND THE 4 TH DIGIT IN THE PAN CARDS INDICATES THAT THE PAN CARD IS OBTAINED IN THE STATUS OF FIRM (AAF F R3849D & AAF F P4957N), THE LEARNED COUNSEL SUBMITTED THAT AS A MATTER OF FACT THE ASSE SSEES FILED APPLICATIONS IN FORM NO. 49A IN THE NAME OF RITESH RAMESH SHAH & OT HERS AS WELL AS PRAFUL RAMESH SHAH & OTHERS IN THE STATUS OF INDIV IDUAL. COPY OF FORM NO. 49A, IN THE CASE RITESH RAMESH SHAH & OTHERS, F ILED BEFORE THE TRIBUNAL SHOWS INDIVIDUALS NAMES ONLY. SHRI V.C. SHAH, CHAR TERED ACCOUNTANT WHO APPEARED BEFORE THE BENCH MIGHT BE CONVERSANT WIT H THE BASIC KNOWLEDGE WITH REGARD TO STATUS AND THE DIFFERENCE BETWEEN IN DIVIDUAL, ASSOCIATION OF PERSONS, BODY OF INDIVIDUALS AND FIRMS. RETURN WAS ALSO FILED AS INDIVIDUAL. HOWEVER, THE LEARNED COUNSEL SUBMITTED THAT HE HAS COLLECTIVELY FILED THE RETURNS ON BEHALF OF THE OTHERS AND HENCE THE AO IS NOT JUSTIFIED IN BRINGING TO TAX THE ENTIRE INCOME. IN HIS OPINION N O INCOME IS ASSESSABLE TO TAX. HE ADVERTED THE ATTENTION OF THE BENCH TO PAGE 2 OF THE PAPER BOOK TO SUBMIT THAT THE ASSESSEES HAVE MENTIONED THAT THE T OTAL INCOME IS NIL AND HENCE IT IS NOT A FIT CASE FOR ADJUSTMENT UNDER SEC TION 143(1) OF THE ACT. HE HAS ALSO PLACED BEFORE THE BENCH A COPY OF THE ORDE R OF THE AO IN THE CASE OF ITA NO. 4373 & 4374/MUM/2014 RITESH & PRAFUL RAMESH SHAHS & OTHRES 5 SHRI RITESH RAMESH SHAH & OTHERS WHEREIN THE AO, IN THE PROCEEDINGS UNDER SECTION 143(3) OF THE ACT FOR AY 2007-08, ACC EPTED THE PLEA THAT IT IS AN INDIVIDUAL BY STATUS THOUGH THE PAN CARD SPECIFI CALLY MENTIONS THAT IT IS ALLOTTED TO A FIRM WHICH CAN BE CONSPICUOUSLY NOTIC ED BY THE FACT THAT THE ORIGINAL PA NUMBER WAS STRUCK OFF AND REPLACED BY T HE NEW PA NUMBER CONTAINING F AS FOURTH DIGIT, UNDER THE SIGNATURE OF THE AO. DESPITE THAT THE AO OBSERVED THAT THE STATUS OF THE ASSESSEE IS GROUP OF INDIVIDUALS WHOSE SHARES ARE DETERMINATE AND ASCERTAINABLE AND HENCE NO INCOME IS ASSESSABLE TO TAX. SIMILARLY, THE ASSESSEES HAVE AL SO PLACED BEFORE THE TRIBUNAL A COPY OF THE ORDER OF THE APPELLATE AUTHO RITY (CIT(A) 25, MUMBAI) IN THE CASE OF JAYESH P. SHAH & OTHERS (HUF) FOR A Y 2010-11 WHEREIN A SIMILAR CLAIM WAS ACCEPTED BY THE LEARNED CIT(A). H E, THUS, SUBMITTED THAT THOUGH THE RETURN WAS FILED IN THE STATUS OF INDIVI DUAL, UNDER SECTION 26, THE INCOME IS ASSESSABLE TO TAX IN THE HANDS OF RESPECT IVE CO-OWNERS IN WHICH EVENT THE NIL INCOME DECLARED BY THESE ASSESSEES OU GHT TO HAVE BEEN ACCEPTED. 11. ON THE OTHER HAND, THE LEARNED D.R. SUBMITTED THAT IF THE INCOME IS EARNED BY A GROUP OF PERSONS IT CAN EITHER BE CLASS IFIED AS ASSOCIATION OF PERSONS OR BODY OF INDIVIDUALS. IF IT IS AN ASSOCIA TION OF PERSONS AND THE SHARE OF EACH INDIVIDUAL IS DETERMINATE AND ASSESSE D AS SUCH THE SAME CANNOT AGAIN BE TAXED AS AOP BY THE AO WHEREAS, IN THE INSTANT CASE, THERE WAS NO ASSESSMENT IN THE HANDS OF THE AOP. IT WAS A LSO SUBMITTED THAT THE ASSESSEE DECLARED, IN THE RETURN, INDIVIDUAL STAT US AND HENCE THERE IS NO QUESTION OF ALLOCATION UNDER SECTION 26 OF THE ACT. UNDER THE CIRCUMSTANCES THE AO WAS JUSTIFIED IN ACCEPTING THE DECLARED INCO ME AS AGGREGATE TOTAL INCOME. HE THUS SUPPORTED THE ORDERS PASSED BY THE AO. HE ALSO SUBMITTED THAT THE LEARNED CIT(A) WAS JUSTIFIED IN HOLDING TH AT UNDER SECTION 143(1) OF THE ACT ONLY CERTAIN ADJUSTMENTS CAN BE MADE AND AL LOCATION OF RENTAL INCOME WOULD NOT FALL UNDER SUCH ADJUSTMENT. HE THU S SUPPORTED THE ORDERS PASSED BY THE LEARNED CIT(A). 12. I HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS A ND PERUSED THE RECORD. THESE TWO ARE MODEL CASES WHICH CLEARLY HIG HLIGHT THE CASUAL APPROACH OF THE ASSESSING OFFICER, THE FIRST APPELL ATE AUTHORITY AND THE ROLE ITA NO. 4373 & 4374/MUM/2014 RITESH & PRAFUL RAMESH SHAHS & OTHRES 6 PLAYED BY THE TAX CONSULTANTS WHILE ADVISING THE AS SESSEES. WHILE APPLYING FOR PAN CARD IT IS DUTY OF THE ASSESSEE TO TICK THE STATUS IN WHICH THE ASSESSEE IS LIKELY TO BE ASSESSED AND IF THERE IS A NY DISPUTE THE SAME HAS TO BE BROUGHT TO THE NOTICE OF THE AO. ORDINARILY, UND ER THE STATUS OF INDIVIDUAL THE NAME OF A PERSON IS MENTIONED. IN THIS CASE THE SE TWO ASSESSEES FILED FORM NO. 49A IN THE NAME OF RITESH RAMESH SHAH & O THERS AND PRAFUL RAMESH SHAH & OTHERS WHICH WOULD CLEARLY INDICATE THAT THEY ARE NOT CLAIMING THE STATUS AS INDIVIDUAL. THERE CANNOT B E ANY DOUBT THAT THE ASSESSEES WOULD HAVE TAKEN SUFFICIENT CARE TO APPLY FOR PAN CARD THROUGH SOME TAX CONSULTANTS BUT STILL THE APPLICATIONS ARE MADE SPECIFICALLY IN THE NAME OF AND OTHERS BUT IN THE STATUS OF INDIVIDU AL. THE TAX AUTHORITIES, ON THE OTHER HAND, APPEARS TO HAVE GONE BY THE NAME COLUMN I.E. AND OTHERS AND ISSUED THE PAN CARD IN THE NAME OF FIR M BECAUSE THE 4 TH LETTER F IN THE PAN CARD DENOTES THE STATUS OF THE ASSES SEE. WHEN THE PAN CARD IS ISSUED IT IS THE DUTY OF THE ASSESSEE TO POINT O UT THE MISTAKE SINCE TAX WOULD BE DEDUCTED AT SOURCE ON THE SAME PAN. AT LEA ST AT THE TIME OF FILING THE RETURNS THE ASSESSEES OR THEIR TAX CONSULTANTS OUGHT TO HAVE TAKEN NOTE OF THIS FACT AND COULD HAVE TAKEN PROPER CARE TO SE E THAT THE RETURNS ARE FILED EITHER IN THE STATUS OF FIRM, IF THEY ARE OF THE OP INION THAT JOINT EFFORTS ARE MADE TO EARN THE INCOME, OR WOULD HAVE INVESTED TIM E IN UNDERSTANDING AS TO WHETHER IT WOULD NEED TO BE CONSIDERED AS AOP/BO I; AS CAN BE SEEN FROM THE ARGUMENTS ADVANCED BEFORE THIS TRIBUNAL AND BEF ORE THE TAX AUTHORITIES, THE CASE OF THE ASSESSEES WAS THAT THE CO-OWNERS HA VE JOINTLY EARNED THE INCOME PRESUMABLY IN THE STATUS OF ASSOCIATION OF PERSONS BUT THE SHARES OF EACH INDIVIDUAL IS DETERMINATE, AND THERE IS NO COMMON AND CONCERTED ACTION TO EARN THE INCOME, AND HENCE THE INCOME IS TO BE SEGREGATED UNDER SECTION 26 OF THE INCOME TAX ACT F OR BEING ASSESSED IN THE HANDS OF EACH INDIVIDUAL. AT NO STAGE OF THE PROCEE DINGS THE ASSESSEES CLAIMED THAT THEY ARE ASSOCIATION OF PERSONS OR BOD Y OF INDIVIDUALS OR FIRM BUT WITH THE HELP OF PAN THEY HAVE FILED THE RETURN S IN INDIVIDUAL STATUS. IRONICALLY, IN THE CASE OF SHRI RITESH RAMESH SHAH & OTHERS THE AO, DESPITE BEING FULLY AWARE OF THE FACT THAT THE PAN CARD WAS OBTAINED IN THE NAME OF FIRM, NOT ONLY ACCEPTED THE STATUS AS INDIVIDUAL BU T ALSO OBSERVED THAT AS INDIVIDUALS THEY HAVE EARNED GROUP INCOME BUT THEIR SHARES ARE DETERMINATE ITA NO. 4373 & 4374/MUM/2014 RITESH & PRAFUL RAMESH SHAHS & OTHRES 7 AND ASSESSABLE. SIMILAR VIEW APPEARS TO HAVE BEEN T AKEN IN THE CASE OF ANOTHER ASSESSEE FOR AY 2010-11 (JAYESH P. SHAH & O THERS, HUF CIT(A)- 25, MUMBAI). THE CHRONOLOGY OF EVENTS GIVE AN INDIC ATION THAT THE TAX AUTHORITIES ARE NOT THOROUGH WITH THE BASIC PROCEDU RE OF TAXATION WITH REGARD TO THE STATUS IN WHICH THEY ARE ASSESSABLE A ND ISSUANCE OF PAN CARD, ETC. MIGHT BE PART OF THE SCHEME OF THINGS AS ASSIS TED BY THE TAX CONSULTANTS AND TAX PAYERS. 13. IN FACT, IN THE CASE OF RITESH RAMESH SHAH & OTHERS (PAGES 18 & 19 OF PAPER BOOK) THE INCOME TAX COMPUTATION SHOWS THE ST ATUS AS FIRM WHEREAS IN THE ASSESSMENT ORDER IT WAS SHOWN AS INDIVIDUAL CANCELLING THE PAN OF INDIVIDUAL AND IN ITS PLACE MENTIONING THE PAN DESI GNATED FOR A FIRM. I HOPE THAT THE SENIOR OFFICERS OF THE INCOME TAX DEPARTME NT WOULD PROPERLY MONITOR SUCH SILLY MISTAKES AND TAKE APPROPRIATE AC TION AT THEIR END SO THAT THE COMEDY OF ERRORS WOULD NOT BE COMPOUNDED SO AS TO COMPEL THE TRIBUNAL TO MAKE ADVERSE REMARKS ON THE DEPARTMENT AS A WHOL E. 14. HOWEVER, THE FACT REMAINS THAT AS PER THE ARGUMENTS ADVANCED BEFORE THIS BENCH, EACH OF THEM HAS A SPECIFIC SHARE IN TH E PROPERTY. IT IS NOT KNOWN AS TO WHAT IS THE COMMON ACTION TAKEN BY ALL OF THEM TOGETHER. THERE CANNOT BE ANY DISPUTE THAT IF INCOME IS EARNED BY V IRTUE OF JOINT ACTION, IT HAS TO BE ASSESSED AS ASSOCIATION OF PERSONS AND NOT IN THE HANDS OF EACH CO-OWNER. IN THE INITIAL YEAR THE AO HAS TO TAKE PR OPER CARE AND ANALYSE THE FACTS OF EACH CASE AND ON EXAMINATION HE SHOULD HAV E RECORDED AN APPROPRIATE FINDING AS TO WHETHER THE SHARE OF EACH INDIVIDUAL IS DETERMINATE AND WHETHER IT IS ASSESSABLE AS AOP OR IN THE HANDS OF EACH INDIVIDUAL UNDER SECTION 26 OF THE ACT. IT ALSO NEEDS VERIFICA TION AS TO HOW THE REFUND IS GRANTED TO THE INDIVIDUAL WITH THE SAME PAN CARD WH EN THE PAN CARD IS ISSUED IN THE NAME OF FIRM. IT IS INTRIGUING THAT FROM YEAR TO YEAR NOT ONLY PROCEEDINGS WERE COMPLETED UNDER SECTION 143(1) BUT ALSO UNDER 143(3)/CIT(A) BUT THIS ASPECT WAS NOT EXAMINED. HAV ING REGARD TO THE OVERALL CIRCUMSTANCES OF THE CASE AND IN THE INTEREST OF SU BSTANTIAL JUSTICE I DEEM IT FAIR AND REASONABLE TO SET ASIDE THE MATTER TO THE FILE OF THE CIT(A) WHO IS DIRECTED TO RE-EXAMINE THE MATTER BY CALLING FOR RE MAND REPORT FROM THE AO AND TO RECONSIDER THE ISSUES IN ACCORDANCE WITH LAW . WITH THESE ITA NO. 4373 & 4374/MUM/2014 RITESH & PRAFUL RAMESH SHAHS & OTHRES 8 OBSERVATIONS THE APPEALS FILED THE ASSESSEES ARE SE T ASIDE TO THE FILE OF THE CIT(A). 15. IN THE RESULT, APPEALS FILED BY THE ASSESSEES ARE T REATED AS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH SEPTEMBER, 2014. SD/- (D. MANMOHAN) VICE PRESIDENT MUMBAI, DATED: 30 TH SEPTEMBER, 2014 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 26, MUMBAI 4. THE CIT 15, MUMBAI CITY 5. THE DR, SMC BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.