9911796707
TMI Blog1976 (1) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... ee to be owner of the Diamond Mining business which was claimed by him to belong to M/s. Tirth Prasad Dwarka Prasad Gupta. As these two appeals are inter-connected, they have been heard together and are disposed of for the sake of convenience, by a common order. The facts of the case are, briefly as under : 2. Shri Tirth Prasad took a lease of certain lands on 31st Jan., 1970 for prospecting for diamond at Panna on payment of Rs. 5. Digging operations were conducted on the leased land and a diamond was found on 27th March, 1970. It was claimed that on 1st March, 1970, he had entered into partnership with his brother Laxmi Prasad to carry on the business of prospecting for diamond and that five of his minor brothers Rajkumar, Anyodhya Prasa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 85 of the ITO Act, that there was no genuine partnership as claimed by the assessee and that the business of diamond prospecting belonged to Shri Tirth Prasad in his individual capacity. He gave the following reasons for refusing registration to the firm and for holding that the business really belonged to Shri Tirth Prasad :-- "1. The lease was taken by Shri Tirth Prasad Gupta in his own name in his individual capacity and not in the name of firm nor as a representative of the firm M/s. Tirth Prasad Dwarka Prasad Gupta. The diamond was also purchased by Shri Tirth Prasad Gupta in his own name and not in the name of firm. 2. There is no clause in the instrument of partnership dt. 1st March, 1970 to the effect that the business shall be do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is name." 3. Accordingly, he also proceeded to pass an order of assessment in the case of Shri Tirth Prasad Gupta treating the loss of Rs. 1,000 as his personal and individual loss. 4. Against the above orders, both the firm and Shri Tirth Prasad filed appeals before the AAC. Agreeing with the findings of the ITO, the AAC confirmed the orders passed by him in the case of the firm as well as in the case of Shri Tirth Prasad. Accordingly, both the parties are in appeal before the Tribunal. 5. The learned counsel for the assessee advanced arguments before us to the effect that the partnership was formed sometimes before the diamond was actually found and that the formation of the partnership was not an after-though to escape tax liability, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been recorded in this connection. From the statement of Tirth Prasad, it would appear that he had no business of his own in the past, that he was about 22 years old at the time of the lease taken by him for prospecting for diamond, that prior to that, he was allegedly giving private tuitions to some school children, that he had married some six years earlier and was staying separately from his father and that he was meeting the expenses of his family out of his own income. His brother Laxmi Prasad was also stated to be married and living separately from his father and his only known source of income, accordingly to the statements recorded, was some petty hawking business, done by him in Tea and Snacks. He did not have a shop or any oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd are allegedly living separately from their father, the question as to show much was their probable income and expenditure and whether they were at all in a position to save such capital has to be considered. For this purpose, something more than mere verbal assertion on their part regarding the alleged saving would be required. Another point which will have to be examined is whether the business carried on by Dwarka Prasad was carried on with a family nucleus or whether it was his individual business. If it is claimed to be an individual business, the source of funds invested in this business will have to be considered. It will further have to be considered whether Laxmi Prasad, Tirath Prasad and the minors are all members of a HUF along ..... X X X X Extracts X X X X X X X X Extracts X X X X
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