TMI Blog2001 (5) TMI 160X X X X Extracts X X X X X X X X Extracts X X X X ..... amount was invested by seven partners in firm who have surrendered Rs. 1,25,000 each on account of such unexplained investment in course of search through the head of the family Shri Ram Sahai the correct name is Ram Swaroop." 3. In this case the original assessment was completed under s. 143(1) by AO on 29th March, 1988, on the basis of return of income filed by the assessee on 31st July, 1987, declaring a loss-of Rs. 9,393. Subsequently, survey under s. 133A was carried out on 27th and 28th Sept., 1988, at the premises of the assessee during which books of account were impounded under s. 131(a). Besides this, search operations were also conducted at the residential premises of the partners of the assessee-firm during which certain incr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee-firm in their returns of income for asst. yr. 1989-90, in pursuance of Expln. 5 to s. 271(1)(c). This explanation was rejected by AO observing that the surrender made by the partners is not applicable in the case of the assessee-firm and he made the additions of Rs. 7,82,974 in the income of the assessee-firm under s. 69 on account of unexplained investment in the construction of cinema building, furniture and plant and machinery. The matter was carried before the learned CIT(A) who confirmed the additions made by AO on this score considering that there is no material evidence on record to show that the partners of the assessee-firm contributed towards the unexplained investment. Aggrieved by the same, the assessee is in appeal bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee-firm for asst. yrs. 1987-88 and 1988-89 and, therefore, the surrender made by the partner of the assessee-firm in his individual case for asst. yr. 1989-90 cannot be correlated to the said investment. Under the circumstances we find the contentions of the learned counsel for the assessee raised before us on the basis of surrender made by the partner of the assessee-firm devoid of any merit and the same is, therefore, rejected. The learned counsel for the assessee has relied on the decision of the Hon ble Supreme Court in the case of Shree Lekha Banerjee vs. CIT (1963) 49 ITR 122 (SC). However, as the explanation offered by the assessee in the present case has been rejected by the authorities below on a specific basis the ratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted on the very first day of the accounting year, and considering the extent of the business it is not possible that the assessee earned a profit of that amount in one day, the amount could not be assessed as the income of the year on the first day on which it is credited in the books. Under s. 68 of the Act, even in such a case the unexplained cash credit may be assessed as the income of the accounting year for which the books are maintained." 6. The decision of Hon ble Supreme Court in the case of CIT vs. P.K. Noorjahan (1999) 155 CTR (SC) 509 : (1999) 237 ITR 571 (SC) cited by the learned counsel for the assessee, however, is directly applicable to the present case. In the said case involving identical facts the assessee, a Muslim lady ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the findings recorded by the Tribunal in that case observing that the discretion has been conferred on the AO under s. 69 of the Act to treat the source of investment as the income of the assessee if the explanation offered by the assessee is not found satisfactory and the said discretion has to be exercised keeping in view the facts and circumstances of the particular case. 7. In the present case the assessee-firm started its business of exhibition of films on 30th March, 1987, whereas the relevant previous year ended on 31st March, 1987. This undisputed fact makes it abundantly clear that the assessee-firm carried out its business only for two days in the year under consideration and there being no other business activities carried ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asthan High Court in the case of CIT vs. Kishorilal Santoshlal (1995) 129 CTR (Raj) 450 : (1995) 216 ITR 9 (Raj) wherein the Hon ble jurisdictional High Court has held that the provisions of s. 68 will cover even those credit entries made through partners accounts in the books of the assessee-firm and if the same remain unexplained, the addition can be made in the hands of the firm. Needless to observe that the said decision of Hon ble jurisdictional High Court is binding on us and respectfully following the same, we reject this contention raised by the learned counsel for the assessee. 9. The learned counsel for the assessee has sought our permission for admission of an additional ground relating to the issue of charging of interest und ..... X X X X Extracts X X X X X X X X Extracts X X X X
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