TMI Blog2015 (3) TMI 153X X X X Extracts X X X X X X X X Extracts X X X X ..... the Department discharges the burden of proof to the contrary.Therefore, the view taken by the Assessing Officer that the partnership firm must explain the source of income for the partners regarding the amount contributed by them towards capital of the firm, cannot be sustained in law. As regards the other amount i.e., unexplained credit entries, the Tribunal took the view that the amount represented the security deposits made by the retail dealers, and the source thereof was properly explained. Nowhere in the order of assessment, the Assessing Officer recorded any finding to the effect that he verified the matter from the respective retail dealers and that such dealers have denied of making deposits. In the field of Arrack business, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ners were deducted. As regards the money paid by the remaining six partners as well as the undisclosed credit of ₹ 31,06,000/-, the matter was remanded to the appointing authority, for fresh consideration. While the appellant filed two appeals, being I.T.A.Nos.1853 and 2072/Hyd/1996, the respondent filed I.T.A.No.1860/Hyd/1996 before the Visakhapatnam Bench of the Income Tax Appellate Tribunal. Through a common order dated 09.07.2001, the Tribunal partly allowed I.T.A.No.1860/Hyd/1996 and dismissed I.T.A.Nos.1853 and 2072/Hyd/1996. Hence, this further appeal under Section 260-A of the Act by the Revenue, against the order in I.T.A.No.1853/Hyd/1996. Heard Sri S.R.Ashok, learned Senior Standing Counsel for the Department. None appear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of the Bombay High Court in Narayandas Kedarnath vs. Commissioner of Income Tax 22 ITR 18 and that of Allahabad High Court in Commissioner of Income Tax vs. Jaiswal Motor Finance 141 ITR 706. Section 68 of the Act no doubt directs that if an assessee fails to explain the nature and source of credit entered in the books of account of any previous year, the same can be treated as income. In this case, the amount, that is sought to be treated as income of the firm, is the contribution made by the partners, to the capital. In a way, the amount so contributed constitutes the very substratum for the business of the firm. It is difficult to treat the pooling of such capital, as credit. It is only when the entries are made during the course ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be assessed as the income of the family unless the Department discharges the burden of proof to the contrary. Therefore, the view taken by the Assessing Officer that the partnership firm must explain the source of income for the partners regarding the amount contributed by them towards capital of the firm, cannot be sustained in law. As regards the other amount i.e., unexplained credit entries, the Tribunal took the view that the amount represented the security deposits made by the retail dealers, and the source thereof was properly explained. Nowhere in the order of assessment, the Assessing Officer recorded any finding to the effect that he verified the matter from the respective retail dealers and that such dealers have denied of m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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