Sumit Tayal, Pune V. Income-tax Officer, Ward - 2 (1), Pune

ITA 999/PUN/2019

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 1476 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 10 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-05-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2016-2017
• Appeal Filed On: 10-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Salary income; Earning of tax free income; Revised return

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B”, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER ITA No. 999/PUN/2019 नधा रण वष / Assessment Year : 2016-17 Sumit Tayal, B-38, Ashwini Society, Pune Mumbai Road, Shivajinagar, Pune 411 005 Maharashtra PAN : AICPT6474B Vs. ITO, Ward-2(1), Pune Appellant Respondent आदेश / ORDER PER R.S. SYAL, VP : This appeal by the assessee arises out of the order dated 03-06-2019 passed by the CIT(A)-3, Pune in relation to the assessment year 2016-17. 2. The only issue raised in this appeal is against the confirmation of addition of Rs.4,12,074/-. 3. Tersely stated, the facts of the case are that the assessee is an individual who filed his original return on 12-07-2016 declaring total income at Rs.9,66,360/-, which was revised on Assessee by Shri Krishna Gujarathi Revenue by Shri M.G. Jasnani Date of hearing 23-05-2022 Date of pronouncement 23-05-2022 ITA No.999/PUN/2019 Sumit Tayal 2 31-07-2016 with total income at Rs.11,66,360/-. In such a revised return, the assessee claimed exempt income of his 10% share in profit of the partnership firm, namely, M/s. Nirman Reality at Rs.49,97,480/-. During the course of the assessment proceedings, it was observed that the assessee’s 1/10 th share in the partnership was only at Rs.45,85,406/-. The Assessing Officer (AO) held that the excess share of profit claimed by the assessee to the tune of Rs.4,12,074/- was in the nature of ‘Income from other sources’. He, therefore, made the addition of such a sum, which came to be sustained in the first appeal. 4. We have heard both the sides and gone through the relevant material on record. Admittedly, the assessee filed revised return on 31-07-2016 showing share in partnership firm M/s. Nirman Reality at Rs.49,97,480/-. The accounts of the partnership firm were actually finalised later on 24-09- 2016 and the assessee’s share was determined at Rs.45,85,406/-. This change in the share in the profit of the partnership firm took place, inter alia, with the corresponding increase in the assessee’s salary originally from the firm at Rs.3.00 lakh which was raised to Rs.5.00 lakh. In the original ITA No.999/PUN/2019 Sumit Tayal 3 return, salary income from the firm was shown at Rs.3.00 lakh with the profit from the firm at Rs.49.97 lakh. However, while filing the revised return, the assessee increased his taxable income by the additional salary of Rs.2.00 lakh but omitted to give effect to the figure of exempt share in the partnership firm which actually got reduced to Rs.45,85,406/- from the original share declared in the return at Rs.49,97,480/-. All the necessary relevant financial statements of the partnership firm have been placed on record which indicate the assessee’s share in the profit at Rs.45,85,406/-. Merely because of a mistake in not lowering the share in profit of the firm from Rs.49,97,480/- to Rs.45,85,406/-, cannot lead to the treatment of the differential amount as ‘Income from other sources’ when all the necessary details and facts show that the assessee’s share in the profit was at Rs.45,85,406/- at the time of finalisation of the accounts of the firm, which was originally at the time of filing of the assessee’s return at Rs.49,97,480/-. Under these circumstances, we are satisfied that there is no reason to treat the difference in the share of profit of the firm as ‘Income from other sources’. The addition is directed to be deleted. ITA No.999/PUN/2019 Sumit Tayal 4 5. In the result, the appeal is allowed. Order pronounced in the Open Court on 23 rd May, 2022. Sd/- Sd/- (S.S. VISWANETHRA RAVI) (R.S.SYAL) JUDICIAL MEMBER VICE PRESIDENT प ु णे Pune; दनांक Dated : 23 rd May, 2022 Satish आदेश क त ल प अ े षत/Copy of the Order is forwarded to: 1. अपीलाथ / The Appellant; 2. यथ / The Respondent; 3. The CIT(A)-3, Pune 4. 5. The Pr.CIT- 2, Pune िवभागीय ितिनिध, आयकर अपीलीय अिधकरण, पुणे “B” / DR ‘B’, ITAT, Pune 6. गाड फाईल / Guard file आदेशान ु सार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune ITA No.999/PUN/2019 Sumit Tayal 5 Date 1. Draft dictated on 23-05-2022 Sr.PS 2. Draft placed before author 23-05-2022 Sr.PS 3. Draft proposed & placed before the second member JM 4. Draft discussed/approved by Second Member. JM 5. Approved Draft comes to the Sr.PS/PS Sr.PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *