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TMI Blog1995 (2) TMI 120X X X X Extracts X X X X X X X X Extracts X X X X ..... Nihal Chand, Harish Chand and Suresh Chand. He formed such opinion on the following grounds: (a) The assessee could not file any reliable documentary evidence to prove that the alleged HUF in the style of Nihal Chand Harish Chand was actually in existence to carry on business of pawning and trading. (b) The assessee could not prove that the alleged HUF had sufficient funds for carrying on business of pawning at such a large scale. The assessee could not give the details of zamindari abolition bond, its number and even the name of the person to whom these bonds were sold for Rs. 40,000. So the claim of the assessee that the HUF carried on the business of pawning with the funds received from the sale of zamindari abolition bond is not substantiated. (c) The claim of the members of the AOP that part of the pawning business was conducted by Shri Nihal Chand in his individual capacity is not correct. The book maintained for individual money lending business of Nihal Chand was not written in the hand writing of Shri Nihal Chand but by Shri Suresh Chand. (d) Shri Nihal Chand, Harish Chand and Suresh Chand were having their individual funds mainly from agricultural income, salary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the year 1981 as Postmaster. Shri Nihal Chand and Shri Suresh Chand were living in the village Kandhla, Distt. Muzaffarnagar. It was an old zamindar family and on abolition of zamindari, bonds were received. The bonds were encashed in the year 1951 for a sum of Rs. 40,000. He further submitted that Nihal Chand and Suresh Chand were living together in the said village Kandhla. No return of income was filed by them prior to the search. He referred the statement of Suresh Chand, Harish Chand and Nihal Chand and submitted that from the statement it is evident that there was no AOP. On the other hand, there was an HUF which carried on the money lending business after the death of Prabhu Dayal, father of Shri Nihal Chand and Shri Harish Chand. He further submitted that the members of the HUF were living together, were having the common mess and were carrying on the business together from the premises belonging to the HUF. Thus, there was a clear evidence of the existence of the HUF as well as of the business carried on by the HUF. He also submitted that there was no evidence of any partition between the members of the HUF and in the absence of evidence to the contrary the normal pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e individual interest income of Shri Harish Chand was out of the amount received by him on retirement from the service. Thus, he submitted that there was clear evidence that the individual interest income of Naresh Chand and Harish Chand was out of their individual funds and it was neither the income of the HUF nor of the AOP. 4. The learned Departmental Representative relied upon the orders of the Assessing Officer and the CIT(A). He also relied upon the statements of Shri Suresh Chand, Shri Nihal Chand and Shri Harish Chand recorded at the time of search. He pointed out that Shri Suresh Chand and Shri Nihal Chand were sitting together in the shop. While surrendering the income, Shri Suresh Chand has clearly mentioned that the income belongs to himself, Shri Nihal Chand and Shri Harish Chand and the surrender is being made with the consent of other two members. The books of accounts were found to have been written by Shri Suresh Chand and in the books of accounts there was no mention about the fact that the books belonged to the HUF. In the statement during the search also nobody mentioned about the existence of the HUF or carrying on of the business by the HUF. He submitted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chand Ramesh Chand Adesh Kumar It is not in dispute that at the time of search the above members (except the members who are in employment outside) lived together with their wives and children. They were having common mess. It is a settled law that the normal state of every Hindu family is joint in the absence of proof of division. Here, in this case, the members of the family who are lineally descendent from a common ancestor (Shri Prabhudayal) were, along with their wives and children, found to be living together. There was no evidence of the partition amongst them. Thus, we have no hesitation in holding that there was HUF in existence. Moreover, the same Assessing Officer, namely, Asstt. CIT, Inv. Cir., Muzaffarnagar has accepted the existence of HUF while completing the assessment of Shri Nihal Chand, Harish Chand, HUF vide his consolidated order for asst. yrs. 1980-81 to 1989-90 dt.30th Sept., 1991as he assessed the income from property at Baghpat in the hands of the HUF on substantive basis. 5.1 The next claim of the Revenue is that there was no nucleus of the HUF. Here also the claim of the Revenue is contradicted by the order of the HUF M/s Nihal Chan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the books of accounts there is no mention about the HUF. The writing of the books of accounts by Shri Suresh Chand will not lead to any inference that the books belonged to AOP and not to the HUF. Similarly if in the books there is no mention of HUF, there is no mention about the AOP also. 5.3 The Assessing Officer has concluded that Shri Nihal Chand, Shri Harish Chand and Shri Suresh Chand were having their individual funds, mainly, from agricultural income, salary income and grain trading income which they pooled together for earning income from pawning and trading. However, we do not find any evidence in support of such conclusion. There was no evidence that Shri Harish Chand invested his salary income for the purpose of business of the HUF. On the other hand, there is clear claim that whatever amount he received at the time of his retirement, was utilised for the purpose of money lending business by him separately. We also do not find any evidence of any individual trading business carried on by Shri Suresh Chand. As per the statement of Shri Suresh Chand, after doing Intermediate in the year 1966, he was sitting with his uncle Shri Nihal Chand. 5.4 The Revenue and the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t? Ans.: In this matter my son Shri Suresh Chand have disclosed the undisclosed income totaling Rs. 5,87,000 in different financial years with which I am agreed. In fact this income is of mine and my son Suresh Chand and my brother Nihal Chand total income of all the three which have been disclosed." Statement of Shri Nihal Chand recorded on21st Feb., 1989: "Besides it, the business of pawning is also carried by Suresh Chand. I am not separated from him and the income of orchard and income from pawning and the income from pulses all remain together and the expenses are also jointly. We have the licence of pawning. The income from pawning would be about 2-3 thousand per month. My two other nephews are in service atDelhiandKota. We do not pay income-tax because our income is of Zamindar." After reading the above statements it is true that Shri Suresh Chand has clearly stated that the income declared by him is the joint income of himself, his father and uncle and this declaration is made by him with the consent of other two members. Such statements of Suresh Chand were also accepted by other members, namely, Shri Nihal Chand and Shri Harish Chand. But from such statements it c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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