TMI Blog2015 (2) TMI 676X X X X Extracts X X X X X X X X Extracts X X X X ..... artnership deed recording the appellant as a partner, is irrelevant, as the firm bears Baldev Singh's name and is based in Samrala. Baldev Singh is a resident of Samrala. All relevant documents pertaining to the auction of liquor vends are signed by the appellant. Baldev Singh has, admittedly, participated in the auction, was allotted liquor vends, has signed all relevant documents and does not deny that he participated in the business, though, allegedly as an employee. The onus to prove this fact having not been discharged, we cannot speculate merely on the basis of malpractices is the liquor business to accept his submissions. The fact that Pritam Singh may not have been called as a witness or examined or did not make this allegation in his initial statement, is also irrelevant as Baldev Singh has admitted his signatures on all relevant documents executed at the time of allotment of the vends and has failed to adduce evidence in support of his plea that he was a mere employee and also renders irrelevant the principle that statement of one cannot be read against another to prove a partnership. As earlier order passed by the CIT(A) which was reversed by the ITAT, by remanding th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ason that Pritam Singh made a disclosure of income from the liquor business. The initial order passed by the CIT(A) referring to the modus of excise vend contractors, namely, putting forward fictitious persons was wrongly reversed by the Tribunal in the first round of litigation. The CIT(A) had held that it is well known in the liquor trade that licences are obtained in benami names and the real beneficiary remains behind the scenes. As there was no evidence of the role of Baldev Singh as a partner, the ITAT committed an error in setting aside the order passed by the CIT(A). The mere fact that Baldev Singh may have signed certain documents pertaining to the liquor vends does not raise inference of a partnership. The main person was and is Pritam Singh, whose statement that he is partner to the extent of 25% and that Baldev Singh is a partner to the extent of 75% has been wrongly accepted by the revenue without referring to any partnership deed or any other documents that would prove that Pritam Singh was partner to the extent of 25% and Baldev Singh, a partner to the extent of 75%. The entire proceedings are based upon the statement made by Pritam Singh, who has cleverly exonerated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and thereby holding Mr. Baldev Singh as partner of the appellant firm without appreciating the provisions of law as per Section 184 and 185 of the Income Tax Act, 1961 and other evidences on record? IV). Whether, on the facts and circumstances of the case, ITAT was justified in reversing a well versed order of CIT (A) in original appeal and thereby holding Mr. Baldev Singh as partner of the appellant firm without appreciating the provisions of law as laid down even under the provisions of the Partnership Act, and its binding nature as so held by Hon'ble Kerala High Court in the case of M.Rajgopal v. K.S.Imam Ali, AIR 1981 Ker 36 and by Hon'ble Allahabad High Court in the case of Mansa Ram and Sons v. M/s Janaki Das Om Parkash, AIR 1984 All 267? V). Whether, on the facts and circumstances of the case, ITAT was justified in reversing a well versed order of CIT (A) in original appeal and thereby holding Mr. Baldev Singh as partner of the appellant firm and thereby confirming the quantum of addition made on the basis of surrender by one Mr. Pritam Singh who was not even partner in the appellant firm? VI). Whether, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used by Pritam Singh. We have though it fit to appraise the impugned orders. The CIT(A) has affirmed this finding. The ITAT has affirmed both these findings. of fact recorded by the CIT(A) and . The appellant-firm Baldev Singh Co., is based in Samrala, Punjab. Baldev Singh is also a resident of Samrala. A search was conducted at the residence of one Pritam Singh, on 25.08.1989, where certain incriminating documents were recovered. Pritam Singh made a disclosure of ₹ 1,90,000/- from liquor business for assessment year 1985-86 and ₹ 1,72,000/- for assessment year 1986-87, amongst other disclosures. Pritam Singh also made a statement that the liquor vends at Ambala were allotted to M/s Baldev Singh Co. of which Baldev Singh was 75% share holder, whereas Pritam Singh and his brothers Surjit Singh and Rajinder Singh were share holders of the balance 25%. A case was initiated against the Baldev Singh Co., through Baldev Singh, under Section 148 of the Income Tax Act, 1961, for assessment years 1985-86 and 1986-87. Baldev Singh, however, did not put in appearance during assessment proceedings and, therefore, an order dated 05.03.1998, was passed under Section 143(3)/1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v Singh. The Assessing Officer noticed that Form no.M-14 contains the name of Baldev Singh, the certificate issued by the Presiding Officer, records that the vends have been sold to Baldev Singh, for a license fee of ₹ 10,25,00/- and the certificate recording announcement relating to the auction also bears the names of Baldev Singh and these documents are signed by Baldev Singh. A relevant extract from this order reads as follows:- 11. It is pertinent to mention here that as per attested copies of auction and allotment records supplied by the concerned competent authorities of Excise and Taxation Department, Sh. Baldev Singh s/o Sh. Kashmira Singh, Resident of Samrala is one of the successful bidder along with others. The documents supplied by the Excise and Taxation Deptt. Contain the signatures of Sh. Baldev Singh (the assessee) along with others at that time before the Excise Authorities. The attested documents received from Excise Taxation department are self explanatory to establish that Sh. Baldev Singh is one of the partner in M/s Baldev Singh Co., Liquor Contractor, Ambala Cantt, H.O. Samrala during the F.Ys 1984-85 1985-86. The documents received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent that Sh. Baldev Singh is partner in M/s Baldev Singh Co., Liquor contractor, Ambala Cantt, H.O Samrala during the F.Y 1984-85 and 1985-86. The objection raised by the counsels of the assessee that the assessee Sh. Baldev Singh never participated in Excise proceedings is not accepted, in view of the concrete evidence in the shape of record of auction and allotment of liquor vends conducted by the Excise and Taxation Department in Ambala District during the F.Y. 1984-85 and 1985-86 as discussed above. In view of these facts and evidences, it is held that Sh. Baldev Singh is a partner in M/s Baldev Singh Co., Liquor contractor, Ambala Cantt. H.O.Samrala during the F.Y. 1984-85 1985-86. The Commissioner of Income Tax (A), examined the matter in its entirety and held that the Assessing Officer was justified in placing reliance upon the record of the auction of liquor vends, conducted by the Excise and Taxation Department, Ambala to affirm the status of Baldev Singh as a partner of M/s Baldev Singh and Co.. The ITAT also examined the entire record, considered the submissions made by the appellant and after recording that even counsel for the assessee has conceded that do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , allegedly as an employee. The onus to prove this fact having not been discharged, we cannot speculate merely on the basis of malpractices is the liquor business to accept his submissions. The fact that Pritam Singh may not have been called as a witness or examined or did not make this allegation in his initial statement, is also irrelevant as Baldev Singh has admitted his signatures on all relevant documents executed at the time of allotment of the vends and has failed to adduce evidence in support of his plea that he was a mere employee and also renders irrelevant the principle that statement of one cannot be read against another to prove a partnership. The first five questions as already noticed, relate to an earlier order passed by the CIT(A) which was reversed by the ITAT, by remanding the matter to the Assessing Officer. Baldev Singh accepted this order, participated in proceedings before the Assessing Officer and filed a response to queries raised after the record of the Excise and Taxation Department after was summoned and, therefore, cannot turn the clock back by challenging this order. It would also be appropriate to point out that the earlier order passed by the CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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