TaxTMI 
TaxTMI 
2026 (8) TMI 1031
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....025, which in turn arises out of an order passed by assessing officer u/s. 147 read with section 144 of the Act, dated 18.03.2022. 02. Brief facts of the case are that the assessee is a partnership firm which was engaged in the business of trading in gold and silver bullion. The Assessing Officer received information that the assessee had effected transactions/turnover aggregating to Rs. 1,11,37,76,800/- during the Financial Year 2013-14 relevant to the Assessment Year 2014-15. Based on such information, the Assessing Officer formed a belief that income chargeable to tax had escaped assessment and issued a notice under section 148 of the Income-tax Act, 1961 on 27.03.2021. Thereafter, notices were issued calling upon the assessee to furn....
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....to in the reasons did not represent two distinct transactions, but substantially related to the same bank accounts maintained with HDFC Bank by Shri Vishal Bharatbhai Vasa in his capacity as proprietor of M/s. Vitrag Trading. It was further submitted that all such transactions were duly recorded in the books of account and reflected in the audited financial statements of the sole proprietorship concern and that the Assessing Officer proceeded without proper verification of the underlying facts. The assessee also submitted that despite furnishing the deed of dissolution and other explanations during the assessment proceedings, the Assessing Officer disregarded the same and completed the assessment by estimating the profit at 8% of the allege....
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....11, the business was carried on by the proprietorship concern of Shri Vishal Bharatbhai Vasa, and the entire income from such date onwards was duly accounted for and offered to tax in the hands of the proprietor. A copy of the Retirement Deed evidencing the conversion was also furnished before the Assessing Officer. The Ld. AR further submitted that the change in the constitution of the firm had already been intimated to the Income-tax Department vide letter dated 11.11.2014, which was duly acknowledged by the jurisdictional Assessing Officer. He further pointed out that, pursuant to summons issued under section 131 dated 26.03.2017 in respect of cash deposits of Rs.1,60,50,000 in the Axis Bank account, the assessee, vide reply dated 30.03.....
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....here were no cash deposits made by the partnership firm during the year under consideration, as all banking transactions after 01.10.2011 pertained exclusively to the proprietorship concern. The Ld. AR further drew our attention to the assessment order passed under section 143(3) of the Act for Assessment Year 2012-13 dated 12.11.2014 in the case of present assessee. He submitted that paragraph 4 at page 2 of the said assessment order itself records that the assessee was engaged in the business of trading in gold and silver bullion. It has been categorically mentioned therein that the partnership firm came into existence with effect from 01.04.2011 and continued only up to 30.09.2011, thereafter, with effect from 01.10.2011, the firm stood ....
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....8, wherein aggregate transactions amounting to Rs. 5,57,35,23,400/- were reflected. Thus, all the bank transactions pertaining to the business after 01.10.2011 were duly disclosed by the proprietor and were subjected to assessment in his hands. The Ld. AR further contended that the reasons recorded for reopening merely referred to specified financial transactions and cash deposits without identifying the particular bank account, branch, or the undisclosed transaction allegedly attributable to the partnership firm. The notice under section 148 of the Act merely referred to specified financial transactions aggregating to certain amounts without disclosing the precise material forming the basis of the belief that income had escaped assessment.....
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....d ceased to exist on 30.09.2011 and stood converted into a proprietorship concern with effect from 01.10.2011.More importantly, the assessment order passed under section 143(3) for A.Y. 2012-13 dated 12.11.2014, which forms part of the record, categorically records that the partnership firm existed only for the period from 01.04.2011 to 30.09.2011, and that the business thereafter was carried on as a proprietorship concern. Thus, the Department itself had accepted that A.Y. 2012-13 was the last assessment year of the partnership firm. Apart from this, the assessee had also informed the Department vide letter dated 11.11.2014 regarding the conversion of the partnership firm into a proprietorship concern, which was duly acknowledged by the De....