TMI Blog1982 (1) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... or a period of one year was renewed for another year and for a further period of three months. It matured on April 25, 1947. Shivkaran received the amount due on the receipt amounting to Rs. 2,10,227. Even though the deposit stood in the joint names of Shivkaran and Radheshyam in the bank at Pudukottah, on the security of the fixed deposit the assessee-firm obtained overdraft facilities with effect from March 28, 1945. During the assessment year 1948-49 the amount of Rs. 2,10,227 was credited to the account of Shivkaran in the books of the assessee. Shivkaran already had an account with the assessee. At the end of S. Y. 2007, corresponding to 1952-53, the total amount standing to the credit of Shivkaran was Rs. 2,51,121. However, in the following year, the balance shown in the account of Shivkaran was Rs. 56,001. A sum of Rs. 2 lakhs was transferred (by Shivkaran) from the said account to the account of firm, Bedi Co., in which Shivkaran who described himself as " Shivkaran Radheshyam carrying on business under the name and style of M/s. Shivkaran Radheshyam at Indore " had become a partner along with Thard Brothers Ltd., and Bedi Co., as the other two partners, some time i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, allowed. When the matter was brought in appeal before the Appellate Tribunal by the ITO, the Tribunal framed three issues for its decision, viz: (1) Who made the deposit with the bank on January 25, 1945 ? (2) Had Shivkaran who has come to own the said deposit the capacity to make such deposits? and (3) Who had enjoyed the beneficial interest in the amount? After considering the material on record the Tribunal found that Shivkaran was an untruthful witness and it was not shown that he had made profits of Rs. 2 lakhs as alleged, out of which the alleged fixed deposit was said to have been made and that Shivkaran's books contained false entry inasmuch as the books showed a withdrawal as on January 25, 1945, at Indore while the fixed deposit was made at Bombay, on January 25, 1945. The Tribunal found as a fact that Shivkaran did not own the moneys put in the fixed deposit, though the receipt was obtained by him in the joint names of himself and Radheshyam. The Tribunal has specifically mentioned in the order that these findings were not challenged before the Tribunal when the present reference was sought. Considering the questions as to whether the moneys did not belon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 87 ITR 349 (SC). Mr. Joshi, on behalf of the revenue, has contended that in appreciating the finding recorded by the Tribunal that the amount of the fixed deposit belonged to the assessee-firm, the totality of the circumstances found by the Tribunal has to be considered and, according to the learned counsel, the finding recorded by the Tribunal cannot be said to be based on suspicions, surmises or conjectures. The learned counsel contended that the facts of the decision in Daulat Ram's case are distinguishable, inasmuch as, while in that case the amount of security deposited on maturity remained with the person in whose name the deposit was made, in the instant case the money has found its way back into the funds of the assessee-partner. ship firm in the form of a deposit in the name of Shivkaran, thus, once again placing those funds at the disposal and under the control of the assessee-firm. We shall later refer to the Supreme Court decision in some detail. For the purposes of this reference we must proceed on the finding that the money deposited in, fixed deposit did not belong to Shivkaran. The question, however, is whether it must necessarily follow from this finding that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne if it appears that the fact-finding authority has acted without any evidence or upon a view of the facts which could not reasonably be entertained or the facts found are such that no person acting judicially and properly instructed as to the relevant law would have come to the determination in question." Bearing this principle in mind, it is enough if we scrutinise the reasons given by the Tribunal in para. 22 of the order in which the Tribunal deals with the question as posed by it, as follows: " Now it only remains to see how, if Shivkaran did not make the deposit and Shivkaran did not own the moneys, can it be said that it is the assessee who made the deposit and it is the assessee who owned the moneys". The Tribunal firstly found that at all times it was the assessee who had control over the funds because, according to the Tribunal, as long as the overdraft continued, the deposit could not have been released. The Tribunal then further found that after the deposit was released in April, 1947, the see once again obtained control over these funds, and if the money really belonged to Shivkaran, he could not have been satisfied with the small interest given by the firm, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... termining the question as to whether the money belonged to the assessee-firm If these circumstances are left out of consideration, the question of control of the partnership firm over the funds also does not arise. Now, so far as the last circumstance is concerned, it appears to us that the reasoning of the Tribunal is rather unsatisfactory. Admittedly, Rs. 2 lakhs which was standing to the credit of Shivkaran in the account books of the assessee have been transferred to Bedi Co. Bedi Co. is partnership firm having three partners. One is the Thard Brothers Ltd., the other is. Bedi Co. Ltd. and Shivkaran is the third partner. The partnership firm, Bedi Co., had obtained a contract from the Housing Commissioner and was in need of funds. Thard Brothers Ltd., which is company registered under the Companies Act and is different from the partnership firm but which no doubt included three partners of the assessee-firm, had financed the firm, Bedi Co. Now, what the Tribunal holds is that the amount of Rs. 2 lakhs standing in the name of Shivkaran must also be treated as a finance supplied by the partnership firm in the name of Shivkaran in the same manner as Thard Brothers Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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