TMI Blog1983 (5) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... rporation though the sales were to different outside parties. In the course of assessment proceedings, the ITO found that a sum of Rs. 22,606 credited to the account of the son of the assessee Sri Mukesh Kumar Thakkar. The ITO enquired about the said entry. The assessee explained that his son took over a part of his business, viz, commission agency portion because he was not able to cope up with the business which was growing and the assessee was also becoming older. The commission agency business for and on behalf of M/s Krishna Co. and M/s Kakubhai Chakubhai of Cochin were exclusively done by his son and so, the commission earned from the above business amounting to Rs. 43,406 in the asst. yr. 1975-76 was credited to the account of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from undisclosed sources. It may be stated that these two amounts were the commission earned from the aforesaid two parties and explained by the assessee as actually earned by his son but disbelieved by the ITO. The assessee went in appeal but the AAC confirmed the additions on the ground that the assessee continues to hold the general power of attorney on behalf of the aforesaid parties and the son of the assessee and also that the entire commission received by the son remained intact in the books of the assessee without any noticeable withdrawals. 4. The ITO started penalty proceedings for both the years and asked the assessee to explain as to why he should not be penalised in respect of aforesaid additions. The assessee explained that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s were rightly imposed. Hence, he confirmed the penalties. 6. Sri D.K. Sheth, the ld. representative for the assessee, urged before us that the penalties imposed were not justified. He emphasised the fact that there was no concealment whatsoever because the entire amount of commission earned by the assessee were recorded in the books of the assessee and the amounts standing to the credit of the son also appeared in the balance sheet. The assessee was growing old. He wanted his son to take over the business eventually and hence, he wanted his son to take over during the years under consideration the agency business thought they continued to be in the name of the father on paper only. In other words, the agreement continued to be between t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Works 1975 CTR (Pat) 25 ; (1977) 106 ITR 452 (Pat) and Addl. CIT vs. Burugupalli China Krishnamurthy (1979) 12 CTR (AP) 250 : (1980) 121 ITR 326 (AP). Further he pointed out that the burden to prove the benami nature of transaction is on the party who alleges it and the department has not led any evidence to show that the son was really the benamidar of the assessee in respect of the commission agency business. 7. Sri G.B.Kanungo, the ld. Representative for the department, on the other hand, supported the order of the AAC. He emphasises the reasons given by her in the appellate order. He drew our attention to the statement on oath given by the son and also the fact that the business was carried on as usual by the assessee as before ina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deposition given by the son and the confirmatory letters filed by the aforesaid parties from Cochin. These documents do show that the son of the assessee did carry on activities relating to the actual conduct of commission agency business. The mere fact that a separate agreement was not entered into between the assessee's son and the aforesaid parties on the mere fact that the assessee continued to receive the amounts from the outside parties did not and could not obliterate the basic fact that there is evidence on record to show that the son of the assessee did actively engage himself in the conduct of the aforesaid commission agency business. We, therefore, did not find anything improbable in the explanation of the assessee. This is case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... F was doing business. Two of the members alleged that they had set up a partnership firm and carried on a part of the business of the HUF. The Tribunal found that the alleged partnership did not exist and the 'capital of the same also came from the HUF funds. Hence, it was clear that the two of the coparcencers set up a device to mislead the department and defraud the revenue. This is clear from the following sentence which occurs at page 372 of the said case: "The whole conduct of the two brothers who constituted the HUF along with their mother was intended to prevent the income from the new business from being taxed in the hands of the HUF. If this was done in a manner permissible in law, the charge of concealment could not have been m ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
