SUNSHINE ENTERPRISE,BANKURA V. ITO, WARD 3(1), , BANKURA

ITA 1110/KOL/2025

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The case involves Sunshine Enterprise, a firm that was dissolved on May 6, 2016, but continued to have financial transactions attributed to it in the assessment year 2017-2018. After dissolution, one of the partners, Abhishek Dutta, continued the business as a proprietorship under the same name. The Income Tax Department treated a cash deposit of Rs. 4,31,000 in a bank account as the turnover of the dissolved partnership firm. The Tribunal had to decide whether this income should be taxed in the hands of the dissolved firm or the individual proprietorship. The Tribunal concluded that since the firm was dissolved and the account was operated by the individual proprietor, the income should not be taxed in the hands of the firm.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 711419 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2017-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHANKAR NASKAR
• Assessee Lawyers: D.K.SEN

Judgement Text

" आयकर अपीलीय अधिकरण, “एस.एम.सी” न्यायपीठ, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH KOLKATA श्री जाजज माथन, न्याययक सदस्य क े समक्ष । BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER आयकर अपील सं/ITA No.1110/KOL/2025 (नििाारण वर्ा / Assessment Year :2017-2018) Sunshine Enterprise, C/o : Abhisek Datta, PO: Sarenga, Dist : Bankura, PIN-722150(WB) Vs ITO, Ward-3(1), Bankura PAN No. : ACJFS 1736 J (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) नििााररती की ओर से /Assessee by : Shri D.K.Sen, AR राजस्व की ओर से /Revenue by : Shri Shankar Naskar, Sr. DR सुनवाई की तारीख / Date of Hearing : 24/07/2025 घोषणा की तारीख/Date of Pronouncement : 24/07/2025 आदेश / O R D E R This is an appeal filed by the assessee against the order dated 27.02.2025 passed by the ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi for the Assessment Year 2017-2018. 2. Shri D.K.Sen, ld.AR appeared on behalf of the assessee and Shri Shankar Naskar, ld. Sr. DR appeared on behalf of the revenue. 3. It was submitted by the ld. AR that the assessee is a firm which was dissolved on 06.05.2016. It was the submission that after dissolution one of the partner namely Abhishek Dutta carried on the business under the proprietorship and holding the same under the name Sunshine Enterprise. It was the submission that one of the bank accounts being the current account maintained in Allahabad Bank bearing Account No.50165499509 was also operated by the proprietor. There were cash deposit of Rs.4,31,000/- in the said bank account. The AO treated the said amount as the turnover of the partnership firm. It was the submission that this amount Printed from counselvise.com ITA No.1110/KOL/2025 2 has also been considered by the individual proprietorship firm and the same has also shown in the balance sheet of the proprietor. The said balance sheet and profit and loss account was shown at page 17 & 18 of the paper book which reads as follows :- Printed from counselvise.com ITA No.1110/KOL/2025 3 Printed from counselvise.com ITA No.1110/KOL/2025 4 4. It was the submission that the said bank account belonged to the proprietor and the firm is no longer exist, therefore, the addition could not be made in the hands of the firm. 5. In reply, ld. Sr. DR submitted that it is a case of non-representation before the ld. CIT(A). It was the submission that the issues may be restored to the file of ld. AO or ld. CIT(A). 6. I have considered the rival submissions. A perusal of the facts in the present case shows that the said bank account belonged to the firm has been shown in the proprietorship business of the individual. The bank account having been shown and the same have also been explained before the AO. It no more can be considered as an account of the firm. As the individual proprietorship has also disclosed the said bank account and the transaction therein in its books of accounts, in my view the addition cannot be made in the hands of the firm. Therefore, the AO is directed to delete the addition as made and confirmed by the ld. CIT(A). 7. In the result, appeal of the assessee is allowed. Order dictated and pronounced in the open court on 24/07/2025. Sd/- (जाजज माथन) (GEORGE MATHAN) न्यानयक सदस्य / JUDICIAL MEMBER कोलकाता Kolkata; ददनाांक Dated 24/07/2025 Prakash Kumar Mishra, Sr.P.S. Printed from counselvise.com ITA No.1110/KOL/2025 5 आदेश की प्रनतललपप अग्रेपर्त/Copy of the Order forwarded to : आदेशािुसार/ BY ORDER, (Assistant Registrar) Income Tax Appellate Tribunal, Kolkata 1. अपीलाथी / The Appellant- 2. प्रत्यथी / The Respondent- 3. आयकर आयुक्त(अपील) / The CIT(A), 4. आयकर आयुक्त / CIT 5. विभागीय प्रविविवि, आयकर अपीलीय अविकरण, कोलकाता / DR, ITAT, Kolkata 6. गार्ज फाईल / Guard file. सत्यापपत प्रयत //True Copy// Printed from counselvise.com "