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ITEM NO.45                 COURT NO.5                 SECTION IIIA

           S U P R E M E   C O U R T   O F   I N D I A                          RECORD OF PROCEEDINGS                      Petition(s) for Special Leave to Appeal (Civil) No(s).31545/2008

(From the judgment and order dated 10/07/2008 in ITA No.87/2004  of the HIGH COURT OF KARNATAKA AT BANGALORE)

M/S FIFTH AVENUE, BANGALORE                          Petitioner(s)

                     VERSUS

COMMR.OF INCOME TAX & ANR.                           Respondent(s)

(With prayer for interim relief)

Date: 09/04/2009  This Petition was called on for hearing today.

CORAM :         HON'BLE MR. JUSTICE S.H. KAPADIA         HON'BLE MR. JUSTICE AFTAB ALAM

For Petitioner(s)    Mr. Soli J. Sorabjee, Sr.Adv. Mr. Preetesh Kapur, Adv.

                    Ms. Radha Rangaswamy,Adv. Mr. Ashok Kulkarni, Adv.

                     For Respondent(s)    Mr. V. Shekhar, Sr.Adv.                      Mr. Arijit Prasad, Adv.                      Ms. Vismai Rao, Adv.                      Mr. B.K. Prasad, Adv.

      UPON hearing counsel the Court made the following                            O R D E R  

Leave granted. The appeal is disposed of with no order as to costs.

         (S. Thapar)         PS to Registrar

(Madhu Saxena) Court Master

The signed order is placed on the file.

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IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 2437 OF 2009 (Arising out of SLP(C) No.31545 of 2008)

M/S FIFTH AVENUE      ...APPELLANT (S)

VERSUS

COMMR. OF INCOME TAX & ANR. ...RESPONDENT(S)       

O R D E R

Leave granted.

In this case the grievance made by the appellant (assessee) is that although the  

High Court had specifically formulated the following question, quoted hereinbelow, it has  

failed to answer the said question which reads as follows:

“Whether the amount allegedly paid by the purchasers on different  dates to the managing partners of the Firm could be brought to tax in  the hands of the appellant-Firm.”

We  find  merit  in  this  contention.   However,  we  find  from  the  impugned  

judgment that there was another question, besides the question quoted hereinabove, which  

has  been  remanded  by  the  High  Court  to  the  A.O.  [See:  para  ‘8’  of  the  impugned  

judgment].  Therefore, in our opinion the above-quoted question is also being remanded to  

the A.O. for fresh consideration in accordance with law. In short, the above question, in  

addition to the question remanded by the High Court, is also being remitted to the A.O.

Before concluding, one aspect needs to be highlighted.  As can be seen from the  

impugned  judgment,  vide  para  ‘7’,  the  entire  unaccounted  money  stood  taxed  by  the  

Department in the assessment year 1993-94 which, according to the impugned judgment,  

was erroneous, therefore, it has been held by the High Court that the matter needs to be

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remitted to the A.O. to ascertain whether Rs.2,32,28,173/- was received by the partners of  

the appellant-Firm during the assessment year 1993-94 or not and based on such finding  

the High Court directed the A.O. to complete the assessment.  In this case there was a  

search during which certain incriminating material  was found.   Therefore,  it  has  been  

rightly held by the High Court that it is for the appellant-Firm and its partners to explain  

and  produce  relevant  documents  before  the  A.O.  to  show  as  to  when  and  how  the  

aforestated amount was received by them.  The High Court further rightly held that if the  

partners of the appellant-Firm are unable to produce any material evidence, then it would  

be open to the A.O. to complete the assessment treating the above amount to have been  

received by the partners during the assessment year 1993-94 only.  Lastly, the High Court  

specifically held that in view of the above direction, appellant (assessee) shall not raise any  

question of limitation.   

We have carefully gone through para ‘7’ of the impugned judgment.  We find no  

infirmity in para ‘7’.  Therefore, it would not be open for the appellant to raise the question  

of limitation in this case before the A.O.

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Subject to above, the civil appeal accordingly stands disposed of with no order as  

to costs.     

....................J. [ S.H. KAPADIA ]

New Delhi, ....................J April 09, 2009 [ AFTAB ALAM ]