TMI Blog2008 (3) TMI 260X X X X Extracts X X X X X X X X Extracts X X X X ..... t the business of Hotel Surat belonged to the partnership firm and not to the assessee as proprietor? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the dissolution deed dated 19.1.1990 was not a lawful, valid and bonafide dissolution deed and assessee concocted the evidence by allegedly executing the deed of dissolution with an ulterior motive to defraud the Revenue?" 2. The Assessment Year is 1991-92 and the relevant accounting period is financial year ended on 31.3.1991. One Dr. Rasiklal T. Acharya (since deceased) filed return of income on 31.8.1991 declaring total loss of Rs. 1,36,398. As against that, the assessment was finalised at a total income of Rs. 12,31,427/- vide Assessment Order dated 25.3.1994 made under sec. 143(3) of the Act. 3. In the statement of income accompanying the return of income, the deceased had claimed loss of Rs. 2,20,402/- stated to have arisen from alleged proprietary business of running a hotel by the name of "Hotel Surat". The Assessing Officer disallowed the said loss and also disallowed the claim of depreciation in relation to business of Hotel Surat by holding that the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re entitled to look into surrounding circumstances to find out the readity of documents relied upon by the assessee- CIT vs Durga Prasad More (1971)82-ITR-540. Taking into consideration in surrounding circumstances and the totality of the facts of the case it can be inferred that the dissolution deed dt. 19.1.1990 was an after-thought and fabricated piece of evidence to be used for the purpose of getting adjustment of loss of Hotel Surat against other income of the assessee. A cursory look on the alleged dissolution deed reveals that it was executed without giving any solid reasons for the dissolving of the partnership firm. It simply states 'as on this date 19.1.1990 and now onwards this partnership will be considered dissolved, and the firm's entire business will be taken care by our partner Dr. Rasiklal Tulsidas Acharya'. Nowhere it has been mentioned whether retiring partner (Smt. Shardaben) got anything on the dissolution of the firm Hotel Surat. It is not doubt witnessed by two witnesses but their addresses are not given. One witness is K.C. Rajput and the other witness has imply affixed illegible signature. Obviously the deed was rushed through in a hurry with an ulterior ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2008. The application stands allowed accordingly." 8. Mr SN Soparkar Learned senior Advocate appearing on behalf of the applicant-assessee submitted that before holding the dissolution deed to be a non-genuine document, no attempt was made by any authority to examine either the signatories to the document or the witnesses on the aspect of the document being back-dated or concocted. Secondly, the assessee had filed a return of income declaring total loss of Rs. 1,36,398/-, against which, assessment had been framed at a figure of Rs. 12,31,427/- and, therefore, it was wrongly assumed that dissolution deed had been got up to seek set-off of loss of Rs. 2,20,00/- odd amount against disclosed income of Rs. 10 lacs. The next submission was that merely because relevant entries had not been made in the books of accounts there was no dissolution was an incorrect inference in law, there being no such proposition in law. Lastly, it was contended that so far as the bank authorities are concerned, the account was being operated as a proprietary account right from inception as was evident from communication dated 14.8.1989 appearing at page No. 76 of the paper-book. It was, therefore, urged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cussed, does not merit acceptance as rightly recorded by the Tribunal because the lady is an educated person, a qualified doctor. Moreover, even the deceased assessee, who claimed that the partnership was dissolved with effect from 19.1.1990, stated that he was having 50% share in the partnership of M/s. Hotel Surat. Therefore, even if the statement of the lady is discounted, there is no explanation as to why the deceased assessee also stated that the business was run by the partnership firm. Admittedly, there is no retraction from the statement by either one of them. 13. On behalf of the assessee emphatic reliance was placed on two certificates, one dated 1.10.1988 issued by the Surat Municipal Corporation and another dated 13.9.1988 (wrongly mentioned as 17.10.1988) issued by the Police Commissioner, Surat to contend that as both the certificates mention only the name of deceased assessee the said documents would support the case of the assessee that the business of the hotel was a proprietary business. This contention also does not merit acceptance because vide letter dated 29.3.1992 the deceased assessee himself accepted before the Assessing Officer that a partnership had i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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