9911796707
TMI Blog1993 (11) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... e, 1985 4,53,172 1982-83 5th Oct., 1985 1,58,544 .. .. 11,11,716 The assessee's explanation was that this amount was part of the disclosure made by the assessee-firm, M/s D.K.B. Co., by Shri R. Bharathan, who was looking after the affairs of the firm. As the Assessing Officer was not satisfied with the explanation, he treated the entire remittances as unexplained investments of the firm. 3. In the books of accounts of the assessee there was an opening balance of Rs. 2,50,000. It was explained that the amount had come out of the following: . Rs. (a)Cash balance as per balance sheet as on 31st March,, 1983 13,406 (b)Lease rent received from D.K.B. Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is difficult to take a decision on facts in the absence of various details considered by the Department for arriving at the figure of Rs. 41 lakhs and also without knowing whether the Department had accepted the availability of Rs. 41 lakhs as reduced by Rs. 10.5 lakhs already distributed amongst the partners, as on the date on which the agreed figure of Rs. 41 lakhs was arrived at. It is quite possible that after the close of the accounting year for 1983-84 or during the said accounting year the assessee or its managing partner Shri Bharathan might have spent away large sums, which were not allowable as deductions in computing the total income for the asst. yr. 1983-84. According to the decided case laws, it is for the assessee to prove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Officer passed fresh orders upholding the additions. In the impugned order dt. 20th March, 1992, he adverted to the circumstances in which the assessee-firm came forward for settlement of its case with an additional income of Rs. 41 lakhs for the asst. yr. 1983-84 and also how a sum of Rs. 31,70,434 was found distributed among the partners of the firm. These are to be found in paras 4 and 5 of his order. At para 6, he gives the summary of the amounts distributed out of Rs. 41 lakhs, which is as follows: . Rs (a) Distribution among partners 10,50,000 (b) Utilised by Sri Sadanandan 2,72,410 (c) Utilised by Sri Subhakaran 3,00,000 (d) Utilised by Sri Sukumaran 75,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hter Smt. Indira Rani. The learned Assessing Officer was of the view that the above three partners did not produce any evidence to show that the funds had come from the account of Shri Bharathan, Ponnamma and Smt. Indira Rani. Therefore, he held that the payment of taxes should have come from out of the unaccounted funds of the firm. In this view of the matter, the sum of Rs. 11,11,716 was added to the income of the firm as before. 6. On appeal, the first appellate authority held that no money would have been left by April, 1985 after explaining away the various investments that has been described in the assessment order. The assessee's representative was asked to show whether there was any cash on hand in the wealth-tax assessment of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e asst. yr. 1985-86 and as this was not done, the funds cannot be said to be available. In our considered opinion, the whole approach is erroneous. The Assessing Officer had collected the evidence of distribution of the additional income only to the extent of Rs. 31,70,434 out of Rs. 41 lakhs and for the balance amount there is no evidence of distribution. There is only a conjecture about its distribution among the partners. The CIT(A)'s approach is equally wrong because based on this conjecture he had asked for the proof of the same in the wealth-tax assessments of the respective partners. Hence, we reject their approach. The sum of Rs. 41 lakhs offered for assessment and assessed as such represented profits kept outside the books. The dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at any rate no material has been placed before us by the Revenue, that he was examined on the issue of tax payments. Yet an adverse inference has been drawn against the firm. As we are in seisin of restored appeal, we do not find it necessary to restore the issue again as it will result in unnecessary hardship and protracted litigation and therefore, we decide the issue on the basis of the materials available before us. In our considered opinion, since out of the sum of Rs. 41 lakhs only Rs. 31,70,434 is found to have been distributed as per the records of the Revenue, it is reasonable to hold that the balance amount of Rs. 9,29,566 had been utilised for the impugned tax payments. To this extent, the addition is deleted. 9. As regards th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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