TMI Blog2007 (7) TMI 204X X X X Extracts X X X X X X X X Extracts X X X X ..... the court was delivered by S.H. KAPADIA J.- Leave granted. The short question which arises for determination in this group of civil appeals is: Whether in the facts and circumstances of the case the Tribunal was right in holding that income on the unexplained investments should be considered in the hands of the firm, M/s. V.V. Enterprises. For the sake of convenience, we mention hereinbelow the facts of the civil appeal arising out of Special Leave Petition (C.) No. 11596/2006. K. Chinnathamban, the respondent-assessee, was connected with the firm by the name V.V. Enterprises, having its premises at Nos. 2 and 3A, East Perumanoor Road, Salem. There was a search in the premises by police officers on August 19, 1991, when Rs. 1.18 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterprises ostensibly was a firm floated for carrying on the business of prize tickets and for collecting deposits from the public. K. Palanisamy was the man behind the said activity. His statement was recorded on various dates. He has admitted that the partners were fictitious. They were not eligible to any shares in the profits of the firm. K. Palanisamy has further stated that monies were lying in various banks in FDRs. in the names of these so-called partners. He further claimed that part of this amount belonged to the members of the public. This part of the statement was not accepted by the Department. In view of the aforestated position the Assessing Officer proceeded to frame the assessment in the hands of Palanisamy on protective ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in as gain. In the present case, the assessee did not adduce any evidence to show that the aforestated amount did not belong to him. In the facts of this case, therefore, the Department was right in drawing inference that the assessee had the aforestated amount as his income which was subject to tax under section 69A. In our view, the Tribunal should not have interfered with these findings of fact rightly recorded by the Assessing Officer and the Commissioner of Income-tax (Appeals). In the present case, the Tribunal has further held that the partners were employees of public sector undertakings; that they had acted as partners; that the firm was floated and, therefore, though the firm was illegally constituted, however, the very existenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present case, books of accounts are not properly maintained. In the present case, there is no explanation regarding the source of investment. In the present case, the evidence of K. Palanisamy, indicates that even the partners of the firm were fictitious. In the above circumstances, the Tribunal had erred in directing linking up of the deposits with the accounts of M/s. V.V. Enterprises. In fact, the directions given by the Tribunal to the Assessing Officer for such linking up was not even capable of compliance. The onus of proving the source of deposit primarily rested on the persons in whose names the deposit appeared in various banks. In the circumstances, the Department was right in making individual assessment in the hands of the respo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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