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CA Ysil Karunai (Querist)

03 July 2011 A Partnership firm M/s Kumar filed a return of income of A.Y. 2005-06 declaring an income of Rs. 2,00,000/-. One of the partners of firm Mr. Shankar is carrying on the same business as that of the firm in his individual name. He has returned an income of Rs. 1,80,000/- for A.Y. 2005-06 from the said business in his personal return. The A.O. is of the view that the income of Mr. Shankar of the Rs. 1,80,000 was infact the income of the firm and the firm has diverted the income to Mr. Shankar. The A.O. by his order u/s 143(3) dated 23.03.2008 assessed the income of partnership firm at Rs. 3,80,000 and deleted the said sum from the assessment of Mr. Shankar. The Assessee firm M/s Kumar filed an appeal to CIT(A) and thereafter to ITAT. The ITAT by its order u/s 254 dated 23.09.2011 deleted the addition of Rs. 1,20,000 from the income of the firm and held that the income of Rs. 1,20,000 belongs to Mr. Shankar. please Advice..

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)

03 July 2011 Now the only door left is that of High Court. You can file appeal before High Court. The chances of winning are that if Mr. Shankar has no transaction with the firm related to the business then you can win other wise you have to accept ITAT judgement.

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