TaxTMI 
TaxTMI 
2010 (6) TMI 163
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....Act 1961 ? 2. Whether on facts and circumstances of the case the Income-tax Appellate Tribunal was right in law for not passing any order on cross-objection on the points of initiation of proceedings under section 147/148 of the Income-tax Act when it is necessary to pass a speaking order giving judgment on all points raised by the assessee whereby the liabilities of tax on the assessee is cast by virtue of the said proceeding under section 148 ?" 3. I. T. A. No. 16 of 2002 was admitted on the following question : "Whether on facts and circumstances of the case the Tribunal was right in law in holding that section 3(1)(f) of the Income-tax Act is applicable on the association of persons borne out of joint venture agreement instead of the right section, i.e., section 3(1)(b) of the Income-tax Act, 1961 ?" 4. The facts giving rise to filing of these two appeals may be summed up thus : (1) The assessee is a private trust created under the deed of trust dated July 18, 1978 and is assessed in the status of association of persons. For the assessment year 1982-83, the previous year of the assessee was the Dewali year ended October 27, 1981. (2) An agreement was entered into be....
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.... 1984-85. (7) The cases of both the assessee and M/s. Sancheti Enterprises arising out of the assessment year 1982-83 ultimately went before the Commissioner of Income-tax (Appeals). The appeal filed by Sancheti Enterprises being No. 169/III/CIT(A)-X/86-87 was disposed of on September 23, 1988. In that appeal, the question was whether the said association of persons was liable to be assessed in the assessment year 1982-83 for which its previous year was the calendar year ended December 31, 1982 in respect of the income arising out of its branch office business, the account of which was closed on March 31, 1982. The Assessing Officer of M/s. Sancheti Enterprises included in the assessment, the remuneration received from M/s. Contemporary Tea Co. Ltd. at the rate of Rs. 45,000 a month from April 1, 1981 to December 31, 1981 amounting to Rs. 4,05,000. (8) The appeal was allowed by the Commissioner of Income-tax (Appeals) by deleting the said amount with the following observations as recorded in paragraph 5 of the order which is quoted below : "I have carefully considered the facts of the case and the submissions made in this regard. The records of this case and that of M/s. Pradeep....
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....t year 1982-83 and included the Rs. 5,40,000 received from the branch office business from April 1, 1981 to March 31, 1982. It appears from the assessment order dated March 31, 1995 that although the Assessing Officer accepted the position that the branch business was a separate source of income, was of the view that the same was assessable for the assessment year 1982-83 because, according to him, the income or loss from different sources of the relevant previous year in relation to a particular assessment year should be taken into consideration for the assessment of the same year. (10) In appeal before the Commissioner of Income-tax (Appeals), the grievance of the assessee was two-fold. First, according to the assessee, there was no justification of invoking the jurisdiction under section 147. Secondly, the addition of the said amount was illegal. (11) The Commissioner of Income-tax (Appeals), by his order dated March 7, 1996 followed the earlier order September 23, 1988 and allowed the appeal by deleting the additional amount of Rs. 5,40,000. The first point taken by the assessee, regarding the justification of invoking section 147 of the Act was, however, not decided by....
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.... Ltd. cannot be treated as salary and there cannot be any determination on monthly basis because the real income can be ascertained only after taking into consideration the expenditure made by the assessee in earning that remuneration and that can be quantified only after the close of the accounting year. 8. Mr. Khaitan further criticized the order passed by the Tribunal for placing reliance upon section 3(1)(f) of the Act, which applies only to a case where the assessee was a partner of a partnership firm. Mr. Khaitan points out that admittedly M/s. Sancheti Enterprises was association of persons till December 31, 1981 after which it became a proprietary concern of the assessee. Mr. Khaitan by relying upon the provisions contained in sub-clauses (iv) and (v) of section 2(31) of the Act submits that the partnership and the association of persons are distinct and different taxable entities. 9. Mr. Khaitan lastly contends that the learned Tribunal ought to have also considered the cross-objection as to whether sufficient ground has been made out for invoking section 147 of the Act in the facts of the present case. 10. Mr. Bhowmik, the learned counsel appearing on behalf of the Rev....
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....he case of any person or business or class of persons or business not falling within clause (a) or clause (b), such period as may be determined by the Board or by any authority authorised by the Board in this behalf ; or (d) in the case of a business or profession newly set up in the said financial year, the period beginning with the date of the setting up of the business or profession ; and- (i) ending with the said financial year, or (ii) if the accounts of the assessee have been made up to a date within the said financial year, then, at the option of the assessee, ending on that date, or (iii) ending with the period, if any, determined under clause ©, as the case may be ; or (e) in the case of a business or profession newly set up in the twelve months immediately preceding the said financial year- (i) if the accounts of the assessee have been made up to a date within the said financial year and the said financial year and the period from the date of the setting up of the business or profession to such date does not exceed twelve months, then, at the option of the assessee, such period, or (ii) if any period has been determined under clause ©, then the period beginning w....
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.... each "separate source of income, profits and gains", however, the word "source" means not a legal concept but which a practical man would regard as a real source of income. 16. In the case before us, M/s. Sancheti Enterprises entered into agreement with Contemporary Tea Co. Ltd., for giving consultancy service on April 1, 1981 which was a different source of income and the remuneration payable to M/s. Sancheti Enterprise was Rs. 45,000 a month for which a branch was opened in Siliguri. For the purpose of earning the said amount, M/s. San-cheti Enterprises was required to incur some expenditure. With effect from January 1, 1982, with the retirement of Ashoke Sancheti, the assessee became the sole proprietor of M/s. Sancheti Enterprises. Therefore, what was the actual income received from such new source could not be ascer-tained until the arrival of the last day of the accounting year of such new source of business and for that reason, such income was shown in the next assessment year of Sancheti Enterprises. Thus, it was not possible to assess the actual income from the said new source until March 31, 1982. It is now settled law that an income-tax liability becomes crystallized o....