1975 (3) TMI 35

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..... ubi Ram Ram Chander and did not show how the order was placed through this firm; that no details were furnished regarding the prevailing prices on the dates on which transactions of purchases and sales were "carried on" by the assessee. The ITO suspected that when income of unit of this group was substantial in a particular year losses were "shown" to reduce the burden of tax in respect of this unit. In any case, in the ITO s view, the Karta did not have any power to do any such business on behalf of the joint family and impose upon the other members of the family risks of a speculation business. The assessee appealed. 3. The AAC allowed the loss. He took note of the vouchers and copy of account of Khubi Ram Ram Chander for the transactio .....

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..... ithout indicating his mind to the assessee and replying wholly on suspicion and irrelevant consideration such as lack of the karta s power to do speculation business on behalf of the joint family. 6. We have considered the material on record. We asked the Departmental Representative to let us know if the ITO ever required the assessee to produce any particular evidence or to prove the speculation loss in any particular manner. (It is common ground that the assessee filed a copy of its account with the party before the ITO). The Departmental Representative was not able to show from the records that the ITO required any particular evidence from the assessee or that he indicated to the assessee that he was not satisfied with the evidence pro .....

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..... not in the hands of the assessee which was an HUF. 8. Facts which are not in dispute before us are: The assessee family has a 10 per cent share in the profits o the said firm for the asst. yr. 1969-70 the firm was treated as an unregistered firm; for that year also the ITO brought to tax at 19 per cent share in the profits of the firm in the assessment of the assessee; the AAC granted registration to the firm and held that the assessee was a partner therein with only 10 per cent share in the profits. 9. The Departmental Representative on the above facts supported the action of the ITO. Shri Sapra, on that the other hand, relied on the order of the AAC and contended that in any case inclusion under s. 64(ii) would be referable to the "i .....

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