TMI Blog2000 (8) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... me-tax (Appeals) on account of unexplained credits in the capital accounts of the partners appearing in the account books of the assessee in the assessment year 1989-90, holding that the amount of such cash credits cannot be assessed as the income of the assessee under section 68 but may be assessed in their individual hands as their unexplained investments if permissible under section 69 of the Income-tax Act, 1961?" A perusal of the record shows that the assessee is a partnership concern comprising the following partners: Per cent. (i) Sh. Gurbax Singh 10 (ii) Smt. Jas Kaur 10 (iii) Sh. T. R. Batra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the accounts of six partners, namely, Smt. Dhan Raj, S/Sh. Sampuran Singh, Harmail Singh, Manohar Singh, Hari Singh and Gurdev Singh, because no tangible explanation had been offered by the assessee in respect of those credits. Learned counsel further argued that the view taken by the Tribunal is contrary to the decision of this court in Smt. Shanta Devi v. CIT [1988] 171 ITR 532 and, therefore, the question sought by the Revenue may be framed and decided by this court. We have thoughtfully considered the arguments of learned counsel. While dealing with the issue relating to the credits shown in the names of six partners, the Tribunal referred to the provisions of section 68 of the Act and observed as under: "11. In our opinion, for e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... name. The Income-tax Officer has added back Rs.15,000 which is wrong and the same should be deleted. It is not out of place to mention that Sh. Sampuran Singh, Shri Harmail Singh and Manobar Singh has also introduced cash in the year, 1981, which is standing accepted, so they can be said to be in the capacity to introduce this minor amount of Rs.10,000 in the year 1988, has also filed copies of the capital accounts of S/Shri Sampuran Singh, Harmail Singh, and Manohar Singh." The Tribunal then proceeded to deal with the individual credits and recorded its findings in the following words: 13. Now, before us, the uncontroverted facts are that Shri Sampuran Singh has retired from the Army as captain and drawing some pension. However, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was shown at Rs.46,963.78 which means that this capital account (for the year April 1, 1978 to March 31, 1989) makes one thing clear that Shri Sampuran Singh has not withdrawn a penny from this account either for his personal/household or for making any other expenditure or for making any investment as has been done in the case of the assessee. However, he has shown to have introduced an amount of Rs.10,000 in cash in the capital account on February 17, 1989, for which, of course, he has no evidence as to from which savings account or from where he made this investment. The capital accounts of Shri Harmail Singh and Shri Manohar Singh on analysis are also found to be similar as that of Shri Sampuran Singh excepting that he has introduced a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is also confirmed by them that they invested Rs.10,000 each in the partnership firm, i.e., the assessee, and the credit entry in their names is found entered in the books of the assessee-firm. However, in our finding as above, it has been held that the assessee has been able to properly explain the cash credits to the extent of Rs.15,000 in total invested by the above creditor and the assessee is not able to explain the cash credit of Rs.15,000, i.e., Rs.5,000 each by Shri Sampuran Singh, Harmail Singh and Manohar Singh. 17. We are of the opinion that if it is found upon confirmation by the partners that the money was, in fact, received from them by the firm, in the absence of any material to indicate that it is the profit of the firm, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is income, he filed a certificate from the village Sarpanch in which he was residing and he has stated that he has working as milk vendor but he has not able to provide any evidence regarding the extent of his earning from the sale of milk, etc., to justify the source of investment of Rs.10,000 with the assessee-firm. The Assessing Officer treated the credit to the extent of Rs.5,000 as explained and added the balance of Rs.5,000 to the income of the assessee. 28. Having considered the entire facts and circumstances with regard to the investment of Shri Gurdev Singh, as discussed above, we are of the opinion that the Assessing Officer has already considered Rs.5,000 as genuine investment by Shri Gurdev Singh in the assessee-firm is more t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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