आयकर अपीलीय अिधकरण, िवशाखापटणम पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Visakhapatnam Bench, Visakhapatnam Before Shri Ravish Sood, Judicial Member and Shri Balakrishnan S., Accountant Member आ.अपी.सं /ITA No.133/Viz/2025 (िनधा१रण वष१/Assessment Year:2018-19)

Vivek Industries, Vs. Income Tax Officer, 8-1, Kamayyathopu Kanuru, Ward-2(3), Vijayawada. Vijayawada.

PAN: AANFM5215A (Appellant) (Respondent) िनधा१ौरती (cid:554)ारा/Assessee by: Shri GVN Hari, Advocate राज(cid:830) व (cid:554)ारा/Revenue by: Shri Badicala Yadagiri, CIT-DR सुनवाई की तारीख/Date of 20/11/2025 Hearing:

घोषणा की तारीख/Date of 05/12/2025 Pronouncement: आदेश / ORDER PER. RAVISH SOOD, JM:

The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income Tax, National Faceless Appeal Centre, Delhi, dated 19/02/2025, which in turn arises from the order passed by the Assessing Officer (for short, ”AO”) under Section 143(3) r.w.s 144B of the Income-tax Act, 1961 (for short, “Act”), dated 08/09/2021, for the Assessment Year 2018-19. The assessee has assailed the impugned order of the CIT(Appeals) on the following grounds of appeal before us.

“1. The order of the learned Commissioner of Income-Tax (Appeals) is erroneous both on facts and in law.

2. The learned Commissioner of Income-Tax (Appeals) erred in confirming the action of the Assessing Officer in treating the appellant as a partnership firm whereas the status of the appellant is an Association of Persons.

3. The learned Commissioner of Income-Tax (Appeals) erred in confirming the action of the Assessing officer in determining the Long Term Capital Gain at Rs.5,52,09,964/-.

4. The learned Commissioner of Income-Tax (Appeals) erred in confirming the action of the Assessing officer in determining the Short Term Capital Gain at Rs.61,34,440/-.

5. The learned Commissioner of Income-Tax (Appeals) erred in not allowing deduction u/s 54F and 54EC of the I.T. Act. The learned Commissioner of Income-Tax (Appeals) ought to have observed the fact that the capital gain was admitted and assessed in the assessment of the members of the AOP and, therefore, cannot be assessed in the assessment of the firm.

6. The learned Commissioner of Income-Tax (Appeals) ought to have considered the fact that the ratio laid down by the Supreme Court in the case of Murlidhar Jhawar and Purna Ginning and Pressing Factory (1966) 60 ITR 95 (SC) and the circulars issued by the CBDT are applicable to the facts of the appellant's case.

7. The learned Commissioner of Income-Tax (Appeals) ought to have seen that when the income is assessed in the hands of the members of AOP or the partners of the firm, it cannot be assessed in the assessment of the firm.

8. The learned Commissioner of Income-Tax (Appeals) erred in giving any direction u/s 150 in the case of AOP whereas the direction can be in the case of the assessee only.

9. Any other ground that may be urged at the time of hearing.”

2. Succinctly stated, the assessee firm which is engaged in the business of manufacturing/production of HDEP pipes and other plastic materials and by-products had filed its return of income for the subject year, i.e., AY 2018-19 on 11/08/2018, declared an income of Rs. NIL. Subsequently, the case of the assessee firm was selected for “limited scrutiny assessment” for verifying its claim for deduction of “capital gains”.

3. During the course of the assessment proceedings, the AO issued notice under section 142(1) of the Act, which was replied by the assessee. On a perusal of the submissions filed by the assessee firm, it was observed by the AO that the assessee firm was constituted vide a partnership deed executed on 14/10/2003 had claimed to have carried on its business activity only up to 06/02/2017. Also, it was observed by the AO that the assessee firm had stated to have purchased 7500 sq mtrs of land at Mankhal Village, Maheswaram Mandal, RR District for a consideration of Rs.11,25,000/- vide a registered sale deed No.3345/2004, dated 11