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of <h1>Appellate Tribunal directs review of property ownership issue and trading account adjustments in tax appeals.</h1> <h3>INCOME TAX OFFICER & ORS. Versus MAHASHYA MARKET & ORS.</h3> INCOME TAX OFFICER & ORS. Versus MAHASHYA MARKET & ORS. - TTJ 010, 403, Issues:1. Ownership of the property known as 'PUPALA MARKET'2. Trading account additions in the cases of M/s Hindustani Book Depot and Shikshak Bandhu PressIssue 1: Ownership of the property known as 'PUPALA MARKET'The main issue in the appeals was the ownership of the property known as 'PUPALA MARKET'. The property was constructed using funds from partners of two firms, M/s Shikshak Bandhu Press and M/s Hindustani Book Depot. The question was whether the property belonged to the partners of the firms or to the firms themselves. The Income Tax Officer (ITO) assessed the property as belonging to the firms based on the funds provided by the partners. The Commissioner (A) initially concluded that the property belonged to the firms but later directed the ITO to determine the ownership and the quantum of addition related to unexplained investment. The assessee sought to raise an additional ground challenging the ownership, but the Commissioner (A) declined permission citing conflicting submissions made by the assessee. The Appellate Tribunal found that the additional ground raised by the assessee was crucial to determining ownership and directed the Commissioner (A) to consider the issue of ownership before deciding on the quantum of addition related to unexplained investment.Issue 2: Trading account additions in the cases of M/s Hindustani Book Depot and Shikshak Bandhu PressIn the case of M/s Hindustani Book Depot, a trading account addition of Rs. 11,324 was made by the ITO due to a lower Gross Profit (G.P.) rate compared to the previous year. The Commissioner (A) upheld the addition as the assessee failed to provide sufficient evidence for the lower profit rate. Similarly, in the appeals relating to Shikshak Bandhu Press, trading account additions were sustained by the authorities. The assessee argued that the profit rate fell due to adverse market conditions, but no substantial evidence was presented to support this claim. The Appellate Tribunal found that the authorities were justified in applying the profit rates from the previous year, as no material was provided to justify a different rate. However, the Tribunal reduced the additions in both cases, considering the estimate of turnover and Gross Profit rate.In conclusion, the Appellate Tribunal allowed two appeals for statistical purposes and partially succeeded in the other three appeals, directing the authorities to reconsider the ownership issue and adjust the trading account additions accordingly.
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