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1990 (12) TMI 140

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..... the stated the nature of the business carried on by the assessee firm and told that the had stared from Siyana, where the assessee firm carries on business, on 27th Feb., 1983 to realise money from the constituents. According to him, his son had also been on a similar tour. According to the statement made by Ramesh Chand he himself realised Rs. 22,000 from the following parties: (i) M/s Satis Chand Ashok Kumar, Lalitpur Rs. 10,000 (ii) M/s Ramu Trading co., Bhind Rs. 10,000 (iii) M/s Hira Lal Badri Prasad, Morena Rs. 2,000 3. The rest of the money was said to have been realised by his son from parties atAgra, Ferozabad, Fariya (Mainpuri) who had delivered the same to him (Ramesh Chand) when the son met him at Bhind. He did not know the exact details o the parties from whom the son had realised the money but gave the names of 9 parties, who could have made the payments. He also stated that the parties form whom the money has been realised stand debited in the books of accounts maintained by the firm on account of Gur having been supplied to them. The next day a survey was conducted at the premises off the firm a .....

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..... ks of accounts kept in the regular course of business also proved that the parties concerned were shown as debtors of the assessee for goods supplied and the factum of Gur supplied was supported by the various registers, etc., maintained by the assessee under the Mandi Samiti Rules. According to him, in such circumstances there was no justification for not accepting the assessee's contention that the entire amount represented the price of goods realised and there was, thus, no unexplained cash in possession of Ramesh Chand and nothing could be added in the income of the assessee as income from undisclosed sources. It was also contended that the ITO had accepted the commission income from the very business which the parties are stated to have denied having had with the assessee it was also contended that there was no justification for assumption that the business with such parties was not Arhat business and was business on self account and that in any case the business that was shown by the assessee to have been done on self account had resulted in a loss which has been accepted by the Assessing Officer and, therefore, there was no justification for assuming that a part of the same .....

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..... all those denials were collected at the back of the assessee and the Assessing Office during the assessment proceedings never informed the assessee of the those denials nor supplied the assessee the copies of statements of those parties. The evidence so collected by the Assessing Officer, therefore, could not be used to support the finding that no such payments wee made to Ramesh Chand and his son. As already stated, Ramesh Chand in his statement made to the Asstt. Director, Investigation atAgraimmediately after has apprehension had specifically named three parties from whom he claimed to have realised Rs. 22,000. He also named several other dealers from whom his son might have realised the dues to make the total of Rs. 58,800 possessed by him. He had also stated that the assessee firm had already supplied Gur to these parties. The assessee's premises were surveyed the very next day and its books of accounts were examined and signed. It is not the case of the Revenue that the parties from whom the assessee claimed to have realised the money were not shown as debtors of the assessee in its books of accounts on account of goods already supplied to them. The Assessing Officer appears .....

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..... and denied having paid Rs. 10,000 as alleged by Ramesh Chand. According to the books of accounts of the assessee firm, this party had business to the extent of Rs. 2,38,091 and the Assessing Office had not demonstrated that any particular transaction recorded in the books of account of the assessee was demonstrably false. Except for the variation in the amount the case of this party is identical with that of Hira Lal Badri Prasad and, for the reasons discussed above, we are of the opinion that the assessee's contention that this firm owed money to the assessee for goods supplied and paid Rs. 10,000 to Ramesh Chand on 28th Feb., 1983 deserves acceptance and, therefore, possession of money to the extent of Rs. 10,000 was established from this source. 8. Sandeep Kumar Suresh Chand : According to the assessee a sum of Rs. 7,500 was realised from this party by Vinay Kumar, the son of Ramesh Chand. One Suresh Chand, said to be doing business at Morena in the name of Sandeep Kumar Suresh Chand, was examined and he denied having had any business whatsoever with the assessee firm. The assessee's books of accounts contained an account in the name of Suresh Chand Sandeep Kumar showing tran .....

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..... the account of M/s Mahabir Agencies, Beena, he total transactions debited were of the order of Rs. 59,381 and the receipt of Rs. 10,000 was credited in the cash book of the assessee on 2nd March, 1983, which entry, according tot e assessee, was made after the return of Ramesh Chand. According to the Assessing Officer enquires made through ITO, Sagar reveal that at Beena there was no concern in the name of M/s Mahabir Agency while there was a concern of the name of M/s Mahabir Agencies doing business of soaps and oils. A partner of this firm, M/s Mahabir Agencies namely, Shri Vijay Kumar was examined and he denied having had any business with the assessee or having made the payment in question. The denial for the reasons stated above, is of little consequence. M/s Satish Chand Ashok Kumar of Lalitpur has not been contacted by the Assessing Office although the assessee had filed a confirmatory letter in support of the transaction and its case specifically was the M/s Mahabir Agencies, Beena is concern of M/s Satish Chand Ashok Kumar, Lalitpur. Here again the transactions recorded in the books of accounts of the assessee showing business worth Rs. 59,381 have not been found to be fal .....

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..... oncerned, the Assessing Officer is not even obtain a denial at the back of the assessee. The supply of goods to this party and the receipt of money amounting to Rs. 6,000 is duly supported by the books of accounts of the assessee and, therefore, there was no reason to disbelieve the assessee's explanation about this item. 12. For the reason stated above we are of the opinion that the assessee had satisfactorily explained the possession of Rs. 58,800 by Ramesh Chand as representing dues realised by the assessee on account of goods supplied to various parties. 13. The case has to be looked from another angle as well. Admittedly the assessee has been supplying goods to various parties either on principal to principal basis or as a commission agent. Therefore, whenever the assessee supplies goods to any party on either basis, sums representing the price of goods so supplied become due to the assessee. It is not disputed that at the particular time Ramesh Chand as sell as his son Vinay Kumar were on a business tour to realise their dues from various constituents. According to the assumption of the Assessing Officer himself the business, which the parties have not admitted and which .....

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..... alternative contention of the assessee has not been accepted by the Assessing Officer by observing as below: "I am afraid, this contention of the assessee is not well founded. In order to press his claim the assessee should first admit that this business was done by it on won account and then should prove that it suffered loss thereon. It is not necessary that a businessman would suffer loss in respect of all transactions in a particular commodity. The very fact that a part of the business in Gur carried on by the assessee on won a/c was sought to be shown as business on commission basis indicates that on this part of the business the assessee must have earned income instead of any loss, as has been shown in respect of the disclosed business on own account. I, therefore, see no reason to accept the assessee's contention in this regard. The total business transactions shown to have been made on commission basis, but not proved to be so, aggregate to Rs. 4,09,526. Hira Lal Badrai Parsad Rs. 37,988. Sandeep Kumar Suresh Chand Rs. 36,402, Sri Kishna Khad Bhandar Rs. 76,774, M/s Mahabir Agencies Rs. 59,381 and Ramu Trading Co. Rs. 1,99,341. Profit @ 10 per cent is estimated on these t .....

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