TMI Blog1980 (7) TMI 146X X X X Extracts X X X X X X X X Extracts X X X X ..... ut of the addition of Rs. 30,000 made by the ITO. 3. The facts briefly are that the assessee entered into a partnerships with two others, Svs. Yashin Qureshi and Hassan. The business of the firm commenced w.e.f. 1st April, 1975. The partnership deed had been drawn up on 14th July, 1975. According to cl. 5 of the partnership deed, each of the partners was to invest fixed capital of Rs. 30,000. The assessee accordingly introduced Rs. 30,000 on the opening day and this amount was comprised of cash in hand Rs. 11,000, stock of old motor parts Rs. 13,500 and stock of old iron scrap Rs. 5,500. Explaining the source of the assessee's investment it was stated before the ITO that the cash of Rs. 11,000 deposited past savings out of the assessee's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount of Rs. 30,000 was included as unexplained investment. 4. The assessee appealed to the AAC. It was explained to the ld. AAC that the assessee had contributed capital to the extent of Rs. 15,000 in the from of old motor parts and from scraps and this was duly debited in the purchases of Rs. 62,205.50 recorded in the books of the firm by contra-credit to the capital account of the assessee. Referring to the ITO's objection that the opening stock of parts etc. of the assessee firm was only Rs. 11,828.50 which could not obviously cover the stock of parts etc. Of the assessee firm was only Rs. 11,828.50 which could not obviously cover the stock of Rs. 19,000 introduced by the assessee, it was urged that stock of Rs. 11,828.50 was actually ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... up in appeal. The case of the Revenue is that the deletion of Rs. 10,000 was not justified since there was no evidence to show that such savings were available with the assessee for investment in the firm and further that whatever income was earned by the assessee from various sources, must have been spent for house-hold purposes. The learned counsel for the assessee, on the other hand, urged vehemently that there was no justification at all for sustaining any addition. Shri N.M. Ranka, Advocate, appearing on the assessee's behalf stated emphatically that having accepted the fact that the assessee had been carrying on kabadi business for the last 17 years, that he had income from agricultural lands and that there were savings from the tail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary evidence which supported the assessee's claim. Over and above that there were affidavits of the known parties stating that the assessee had been doing kabadi business for the last several years and he did have stock of the value of Rs. 15,000 to Rs. 20,000 with him. Evidence was also produced in the form of an agreement of sale for purchase of junk in the form of truck. The assessee showed income from kabadi business in asst. yr. 1975-76 and also in 1976-77 which was accepted. Even though the assessee's own books of account were not there, all this material and evidence had been placed before the authorities below. It has been urged by the ld. counsel for the assessee that without rebutting all this evidence, the ITO and the ld. AAC cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oubt, he could have called upon the assessee to explain the position. The assessee was the only person who could satisfy the ITO in this regard. The statement recorded by the ITO and the cross-examination done do not show that any such enquiry was ever made. The ITO drew his own inference that since kabadi business continued to be carried on by the assessee, stock if any, must have been utilised for that business. We are unable to support such inference based on pure guess. The stock was introduced in the firm and there was no evidence for that in the form of books of account. There was thus no question of presuming that the assessee utilised this stock for carrying on personal business. How the assessee carried on the personal business and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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