TaxTMI 
TaxTMI 
2019 (6) TMI 1111
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....pellate order that ''if the money would have been collected from the five individual partners out of their own resources then the profit arising from the sale would have to be taxed in their individual hands in not the hand of the firm. It is a fact that the Assessing Officer has assessed the income on sale pf the land in the hands of the firm where the partners are not sharing profits equally''. The only issue raised by the assessee is that the Ld. CIT-A erred in observing that the profit would have been taxed in the hands of the partners if the partners would have collected the money out of their sources. 2. The assessee is an Individual who is also a partner in the firm, namely Uma shakti corporation. During the year under consideration, a search u/s 132 was carried out in the case of Umiya group on 04-03-2010 and subsequent dates. Accordingly a warrant u/s 132 was also issued to the assessee being one of the parties of the Umiya group. During the search, a statement of one of the partners of Uma shakti corporation namely Shree Vikas R Patel u/s 132(4) was recorded on 05-03- 2010 where he admitted that the following persons have 50% shares in Smamarpan scheme.: Name ....
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....tner made no personal investment. (iv) After payment made by the group, the strategy was changed, and the land was sold out to Shri Krishna corporation. (v) Noting on page no 145 of seized annexure A-I are as under: Amount received from samarpan group Rs. 2.40 crores Amount paid to farmers Rs. 185.30 lacs Amount paid for settlement of occupying farmer Rs. 21.00 lacs Amount paid for AUDA and NA Rs. 12,36,500/- Total payment of Rs. 2,19,66,500/- 3.1 Thus, the Uma shakti corporation earned a profit of Rs. 20,33500 plus cheque payment of Rs. 10.40 lacs. Therefore the total profit of Rs. 31 lacs was offered to tax by the USC in the return of income for AY 2010-11. 3.2 In view of the above, the assessee submitted that the investment of Rs. 9 lacs by the partners was appropriated from the extra collection of the firm M/s Uma shakti corporation. The funds for the samparpan project were deployed by the firm M/s Uma shakti corporation. The names of the partners were noted for memories. The firm offered Rs. 109 lacs as profit from the extra collection. Therefore the payments are not unexplained. 4. However, Ld. CIT (A) after considering....
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....raised by the assessee stands covered in his favor by the order of this tribunal in the case of Bhagwan bhai Karmanbhai Ajara (supra). The relevant extract of the order is reproduced as under: 55. We have heard the rival contentions and perused the record placed before us. We notice that during the assessment proceedings, Id. Assessing Officer found that Mr. Vikas R. Patel, partner of USCKP made in his statement dated 05.03.2010 recorded under Section 132(4) of the Act that five persons mentioned therein including the assessee were supposed to contribute Rs. 1.50 crores in the Samarpan Scheme; however, till the date of search only Rs. 45,00,000/- was contributed. Further from page No.145 of Annexure-A/1, Id. Assessing Officer found that there was a noting of contribution of Rs. 9,00,000/- in the Samarpan Scheme and merely on the basis of this noting, he made the impugned addition. We further observe that assessee has contended before the lower authorities that the investment was made out of funds received from members of USCKP and not by the assessee. In fact, profit of Rs. 31,00,000/- on account of land deal in the Samarpan Scheme has also been declared ....
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....n Karamanbhai Ajara 35% 3. Shri Brijesh Sukhdevbhai Patel 10% 4. Shri Deepak Govindbhai Prajapati 15% 5. Shri Arvind Natvarlal Prajapati 10% 6. Shri Kamalbhai Jayantibhai Patel 20% TOTAL 100% If it was a fact that the amount of Rs. 45,00,000/- have been contributed by five partners @ Rs. 9,00,000/- each from their own sources then there would have been no occasion to offer the profit in the hands of the firm where there were six partners. This is to say that if five persons had contributed towards cost of lands then there would have been no reason for them to share the profit from the transactions with the sixth person i.e. Shri Kamalbhai Jayantibhai Patel who had not contributed any capital. It is also to be noted that the profit sharing ratio of all the partners in the firm is not equal. If the five persons had contributed Rs. 9,00,000/- each then there would be no occasion to not share the profits from the transaction equally. Thus, it is clear that only tlie funds of the firm M/s. Uma Shakti Corporation were utilised for the purchase of land titled as Samarpan Project which was later sold to Shri Krishna Corporatio....