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TMI Blog1985 (1) TMI 119X X X X Extracts X X X X X X X X Extracts X X X X ..... jections filed by the assessee the order passed by the AAC had been supported and at the same time it had been contended that the appeals filed by the Department were not on a prescribed form and were filed beyond time. It has also been contended in the cross objection that ground No. 1(iii) identically raised in the Revenue's appeals contained a misstatement of facts. In the appeals filed by the assessee for the asst. yrs. 1975-76 to 1979-80 objection is taken to the estimate of sales as maintained by the AAC and to the non-allowance of interest on certain loans. 3. In the asst. yrs. 1970-71 to 1979-80, the ITO had framed the assessment in respect of the following incomes from property, hiring charges and unexplained investments in the hands of the assessee individual on substantive basis and in the hands of the alleged HUF of the assessee on protective basis: Asst. Year Income from property situate at 87, Civil Lines,Bareilly. Income from furniture, hiring etc. Income form unexplained investments in the construction of property situate at 87, Civil Lines. 1970-71 Rs. 5,228 - Rs. 11,975 1971-72 Rs. 5,358 - Rs. 11,975 1972-73 Rs. 3,740 - Rs. 11,975 1973-74 Rs. 3, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, hiring charges and unexplained investment belonged to the assessee individual and not to his HUF. It was as a result of this conclusion reached by the ITO that the assessments of Kishanlal, individual were finalised on substantive basis and the assessments of the same incomes had been made in the hands of the alleged HUF of Kishanlal on protective basis. 5. Against the above findings of the ITO as given in the orders passed in the cases of Kishnalal, HUF and Kishanlal, individual, the assessee filed appeals only in the cases of Kishanlal, individual. As per the records no appeals seem to have been filed in respect of the assessment protectively framed in the case of Kishanalal, HUF. The AAC examined the material brought on record by the ITO but he negatived the findings of the ITO for the following reasons: 1. The notary R.P. Tayal having admitted the fact that the declaration had been signed by him on31st March 1968, the ITO was not justified in coming to the conclusion that the document was anit-dated. 2. The mere fact that the old and the new seals of the notary had been affixed on the declaration did not conclusively prove that the declaration had been signed by the notar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duced before us the original document purported to have been executed by Kishanlal on31st March 1968. On going through this document we find that the notary had initially stamped the seal when he had telephone No. 5108 allotted to him. As per the statement of the notary R.P. Tayal and as per the letter dt.2nd Nov. 1979of Telephone Department,Bareilly, the telephone No. 5108 had been installed at the premises of the above named notary on23rd Nov. 1974. This initial seal stamped by the notary was superimposed by another seal of the same notary which shows his telephone number as 3082. The initial stamping by the notary and the super-imposition of another seal by the same notary was, according to the ld. Departmental Representative done in order to show that in fact the document had been produced before the notary on31st March 1968when his telephone No. was 3082. According to Mr. Jain the same has been found to be a fact by the Senior Scientific Officer (Documents) cum Assistant Chemical Examiner to the Government of India vide report dt26th March 1980. Mr. Jain explaining that all this had been done in order to get over the provisions of s. 64(2) of the IT Act, 1961 which provided th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, Bareily which had been by that time let out to Kashi Nath, Jeweller and a share emporium was the property of the assessee constructed in the name of his wife. Mr. Jain has also taken us through the statements on oath of Shri Kishanlal and Shri R. P. Tayal, notary in order to contend that the document in question dt.31st March, 1968had not actually been executed on that date but on a subsequent point of time in order to get over the provisions of s. 64(2) which became operative w.e.f.31st Dec., 1969. 8. With regard to the decision of the ITAT in Kishanlal vs. WTO in W.T.A. Nos. 1642 to 1644 decided on 18th Dec., 1982, the ld. Departmental Representative submits that, that should not be followed as the Tribunal had not taken into account the results of the investigations and regarding the genuineness of the document purported to have been made on 31st March, 1968. As far as the decision in the case of Addl. CIT vs. V.K. Purwar 1978 CTR (All) 39 : (1979) 116 ITR 908 (All), on which reliance was placed by the AAC, is concerned, the learned Departmental Representative says that that was a decision given on entirely different facts which had no relevance whatsoever for deciding the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt stands completely frustrated if one was to look into the document and go through the report of the Senior Scientific Officer (Documents) The report of the Senior Treasury Officer, Bareilly is also very significant in that regard. This clearly shows that the notarial stamp of 50 paisa which was affixed on the document was not available for sale as on31st March, 1968. Since it was available for the first time on31st March, 1970the document cannot be said to have been executed on any date prior to this date. The commutative impression that one gets from all the above mentioned facts and the fact that the verification of the document was not singed by the notary is that the document was neither valid nor genuine. The fact that in the asst. yrs. 1968-69 and 1969-70, the assessee had shown the income from property in question as his own individual income also clearly indicates the fact that as on31st March, 1968there had been no blending of property or throwing into the common stock of the HUF by the assessee individual. The order sheet entry dt.22nd Dec., 1977recorded by the ITO in the course of the assessment proceedings of the assessee individual for the asst. yr. 1974-75 also sign ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision of the Hon'ble Allahabad High Court in the case of Addl. CIT vs. V. K. Purwar 1978 CTR (All) 39 : (1979) 116 ITR 908 (All) also seems to us to be misplaced. In that case their Lordships had held that a separate property can be converted into a family property even when there is no already existing joint family property. For so holding their Lordships had taken into account the decision of the Hon'ble Supreme Court of India in the case of Narendar Nath (1969) 74 ITR 190 (SC). The subsequent decision of the Hon'ble Supreme Court in the case of Surjit Lal Chhabda 1976 CTR (SC) 140 : (1975) 101 ITR 776 (SC) had not been brought to their Lordship's notice. In these circumstances, we are of the view that decision of the Hon'ble Allahabad High Court in the case of V. K. Purwar would not help the case of the assessee. 12. After going through the decision of the Hon'ble Supreme Court in the case of Surjitlal Chhabda, we find that the facts in the present case and the facts in that case were substantially peri materia. In the case of Surjit Lal Chhabda, that assessee had thrown an immovable property into the common stock in order to impress that property with the character of join ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the appeals had not been filed in amended form No. 36 also does not go to the root of the matter. The Form No. 36 had since been amended in as much as the particulars of total income returned and total income assessed were also required to be indicated in the revised form. The mere omission of these two particulars would not, according to us, invalidate the appeals filed by the Revenue. We therefore see no substance in the first identical ground raised in the cross objections. 16. In the second ground identically taken in the cross objections by the assessee, the order passed by the AAC is supported on the basis of the order of the Tribunal passed in the case of the assessee (WTA Nos. 1642 to 1644/Del/81 decided on 18th Dec. (1982)). We have already considered this point while deciding the Revenue's appeal and for the reasons mentioned therein, we see no substance in ground No. 2 of the cross objections. 17. In ground No. 3 it is pointed out that the Revenue was not justified in making a wrong statement of fact while taking ground No. 1(iii) in appeals Nos. 2889 to 2898. It has been submitted by the ld. Departmental Representative that whatever stands stated in ground No. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision Sales-tax. As far as reduction of profit was concerned, the AAC held after taking into account the comparable cases that the rate of profits as determined by the ITO i.e. 16per cent was reasonable. After going through the orders passed by the ITO and the AAC we are satisfied that it was a case where the provisions of s. 145 were attracted. Books of accounts had been maintained in a manner that these did not permit proper deduction of profits therefrom. We would, therefore, uphold the order of the AAC that the provision of s. 145 were applicable. The sales estimated by the AAC also appear to us to be reasonable in the various assessment years and, therefore, we would reflect ground No. 1 (iv). In the Revenue's appeal for the asst. yr. 1970-71 to 1978-79 and appeals Nos. 2782 to 2786 filed by the assessee for the asst. yr. 1975-76 to 1979-80 and ground No. 4 in the cross objections filed by the assessee. 21. There is one other ground identically taken in five appeals by the assessee regarding the non allowance of interest out of his business income. We find that there is no substance in it as the profit of the assessee from furniture business had been determined by applying a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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