TMI Blog1997 (2) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... e is a Hindu undivided family. For the assessment year 1971-72, the assessee returned a sum of Rs. 5,034 as income from interest received from certain parties. The assessee's premises and also the premises of certain other relatives of the assessee, like his father-in-law, brother-in-law, etc., were searched by the Department. The search revealed that the assessee was in possession of pronotes executed in favour of the assessee's relations, viz., Smt. Padmalochani Ammal (wife), Muthukumarappa Reddiar (father-in-law), Jayalakshmi Ammal (mother-in-law), Veerappa Rajaram Reddiar (brother-in-law) and Bangaru Reddiar (close relative). Certain cash books were also found and seized. The Income-tax Officer found that the seized books contained tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eleting the other additions by the Income-tax Officer. Both the assessee and the Department appealed against the Appellate Assistant Commissioner's order, the former against the Appellate Assistant Commissioner's sustenance of the addition of money-lending income of Rs. 1,47,543. On hearing both the parties, on appeal, the Tribunal came to the conclusion that though the parties in question were closely related to the assessees there was no evidence to hold that the assessee was holding these amounts in benami names. The Tribunal held that these persons cannot be held as the benamidars of the assessee, who had invested moneys in their names. Ultimately, the Tribunal sustained interest at 22 per cent. instead of 24 per cent. adopted by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cent. from 24 per cent. the Tribunal ought to have deleted the inclusion of a portion of the interest in the hands of the assessee. It was, therefore, submitted that the Tribunal ought to have deleted the entire addition. On the other hand, learned standing counsel appearing for the Department, submitted that considering the fact that the assessee was rendering services to his relatives in the matter of advancing amounts to third parties, the Tribunal held that the assessee would have used a portion of the interest collected for his personal purpose, and, therefore, to that extent, the addition is called for. It was, therefore, contended that the order of the Tribunal in deleting Rs. 62,000 out of the entire interest amount is not in ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the head "Interest" and accordingly gave a concession of Rs. 62,000 in ascertaining the total interest received on the pronotes amounts. According to the Tribunal, a sum of Rs. 62,000 collected by way of interest is not assessable in the hands of the assessee, but a sum of Rs. 85,543 is assessable under the head "Interest". Learned counsel appearing for the assessee submitted that when the Tribunal found reasons to allow Rs. 62,000 out of Rs. 1,47,543, on the same reasoning, the Tribunal ought to have allowed the balance of interest also. It remains to be seen that the principal amounts were not added in the hands of the assessee. The Tribunal sustained out of Rs. 1,47,543 a sum of Rs. 85,543. According to the Tribunal, the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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