9911796707
TMI Blog2015 (3) TMI 153X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 1961 (for short the Act) through order, dated 31.03.1995. Later on, steps were taken for necessary rectification and notices under the relevant provisions of the Act were issued. Though several aspects were dealt with, the principal controversy was about the contributions made by as many as 10 partners aggregating to Rs. 76,57,263/-; and the alleged undisclosed credit entries amounting to Rs. 31,06,000/-. The explanation of the respondent that the partners have paid various amounts towards contribution of their share in the capital was not accepted. Similarly, the explanation offered in respect of the undisclosed credit entries was rejected. In the appeal preferred by the respondent before the Commissioner (Appeals), the amounts paid by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... them made contributions, be it in the form of cash or bank guarantees to be furnished to the Government, at the commencement of business. The returns submitted by the respondent-firm were processed, and the facts and figures furnished by it were accepted. However, the matter was reopened at a later point of time. The Assessing Officer treated the capital raised by the firm in the form of contributions made by the partners as income. This conclusion was arrived at on the ground that source of income for the partners was not explained. Learned counsel for the appellant placed reliance upon the judgment of the Patna High Court in Commissioner of Income Tax vs. Anupam Udyog (1983) 142 ITR 133. The Tribunal rested its conclusions upon the judgme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not an assessee, he can be required to file a return and explain the source. Undertaking of such an exercise, vis-a-vis the partnership firm itself, is impermissible in law. In the judgment relied upon by the appellant itself, the Patna High court held as under: If there are cash credits in the books of a firm in the accounts of the individual partners and it is found as a fact that cash was received by the firm from its partners, then in the absence of any material to indicate that they are the profits of the firm, they cannot be assessed in the hands of the firm, though they may be assessed in the hands of the individual partners. Cash credits in the individual accounts of members of a joint family with third party cannot be assessed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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