TMI Blog1993 (8) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... e assets and liabilities of the old firm taken over and business continued. The plant situated at Bilaspur Distt.Kanpurwas also taken over by the reconstituted firm. Assessee, accordingly, filed two returns of income in respect of these two firms. Assessing Officer was of the view that since there was a change in the constitution of the firm during the previous year, within the meaning of s. 187(2) he made a single assessment in respect of the income for the two periods. Status of the firm was taken as that of URF. 3. Assessee appealed to the first appellate authority on the ground, inter alia, that two separate assessments ought to have been made by the Assessing Officer. It was also claimed that registration ought to have been granted to the firm in respect of the first period as Form No. 12 had been filed by the assessee and for the second period the Assessing Officer should have condoned the delay in filing of the application in Form No. 11/11A. The CIT(A) rejected the appeal of the assessee in respect of making of one assessment and grant of registration to the firm. 4. The learned counsel for the assessee contended that the Assessing Officer and CIT(A) were not justified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vious year two separate assessments shall have to be made-one upto the date of dissolution and another for the second period. In this case, assessee has claimed that the firm has been dissolved on25th July, 1985. In support of the claim, assessee has referred to the dissolution deed executed between the parties and also the intimation given to the Registrar of Firms and notification issued in this behalf. Revenue's claim is that there has been no effective dissolution and, therefore, the decision of the Hon'ble Supreme Court in the case of Wazid Ali Abid Ali is inapplicable. The facts and circumstances of this case do suggest that there has been only a change in the constitution of the firm as opposed to the dissolution of the firm and succession thereof. The evidence referred to by the learned counsel for the assessee in the form of dissolution deed and intimation to the Registrar of Firms on the other hand suggests that assessee intended to dissolve the firm. However, whether there has, in fact, been dissolution of the firm or not would be a matter of evidence. Since perusal of the dissolution deed and the partnership deed executed by the parties strongly suggest that there has, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application as none had been filed before making of the assessment. Application filed on15th Oct., 1988is non est as far as the year under appeal is concerned. The fact that application for condonation has been accepted for asst. yrs. 1987-88 and 1988-89 as stated by the learned counsel would be on its own facts and as far as this year is concerned, there is no question of any condonation of delay as no application had been filed for registration upto the time of making the assessment. 7. In the case of Wazid Ali Abid Ali there was a firm consisting of 17 partners, which had been granted registration for asst. yr. 1964-65. One of the clauses of the partnership deed provided that on the death or demise of any partner, the firm shall not be dissolved, but shall be carried on with the remaining partners and the heir/representative of the deceased partner on mutually agreed terms. On4th June, 1964one of the partners died and his son joined as a partner. No new deed was executed during the previous year which ended on7th Nov., 1964. Assessee had filed a declaration in Form No. 12 for asst. yr. 1965-66 for continuation of registration. The Tribunal held that on the death of a partner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue of making of two separate assessments. Should the Assessing Officer find that there has been de facto dissolution of the firm, two separate assessments will have to be made by the Assessing Officer. In that event the claim of the assessee relating to depreciation for each period shall have to be considered in accordance with law. 9. The sixth ground of appeal is relating to disallowance of consumable stores amounting to Rs. 24,036. Assessing Officer had made addition of Rs. 16,151 for the first period and Rs. 24,036 for the second period on the ground that consumable stores, such as, limestone, coal, diesel had been purchased by the assessee even after the crushing season was over and such stocks should have been reflected in the closing stock as on the close of the previous year. The learned CIT(A) has deleted the addition of Rs. 16,151 on the ground that for the first period, the addition made would be allowable as a deduction in the second period as opening stock. In respect of the addition of Rs. 24,036 the learned counsel for the assessee contended that additional evidence was sought to be produced before the CIT(A), which has, arbitrarily been rejected. According to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the findings of the CIT(A). 14. In our view, the decision of the CIT(A) does not call for any interference in this regard. The learned CIT(A) has found, as a matter of fact, that the statement on account of payment to labourers was in the hand-writing of Onkar, a labour contractor and not the Munim of the assessee. The statement of Shri Onkar had been recorded at the time of survey and he had confirmed that the statements of accounts were in his hand-writing. The Assessing Officer has not been able to point out with reference to the books of accounts that the payments to the labourers had not been duly recorded. The inference drawn by the CIT(A) from the fact that the payment to labourers in any case was allowable as an expenditure and, therefore, the assessee had no reason to keep the payments outside the books of accounts is, on the facts and circumstances of this case, is justified. We agree with the reasoning as well as the conclusion arrived at by the CIT(A) in respect of addition of Rs. 50,540. 15. Next ground of appeal is relating to addition of Rs. 1 lakh having been deleted by the CIT(A) on account of FDRs found at the time of survey in the name of Shri Surinder Kumar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under s. 132(4) was available to the Assessing Officer. The decision of the Supreme Court in the case of Jamuna Prasad Kanhaiyalal is inapplicable to the facts of this case. The principle laid down in that case would be applicable only if the firm had made an investment and the source had been explained out of disclosure made by a partner. In this case, FDR is in the name of the partner and the source is explained out of the disclosed income. The immunity is claimed by the declarant and not by the firm. The addition in the hands of the firm, in our view, is uncalled for and the CIT(A) was justified in deleting the same. 18. The next ground of appeal is relating to the addition of Rs. 16,051 on account of expenses incurred on consumable stores having been deleted by the CIT(A). This issue has been dealt with by us in assessee's appeal. The addition of Rs. 16,051 had been made by the Assessing Officer for the first period and another addition of Rs. 24,036 made in the second period on the ground that the assessee had purchased consumable stores after the crushing period and these stores ought to have been reflected in the closing stock. The CIT(A) has upheld the addition of Rs. 24, ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
