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TMI Blog1979 (4) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... d partial partition prior to the constitution of the firm in this case. The assessee produced a memorandum of partition alleged to have been executed on 29th Oct., 1970. The ITO, however, noticed that this document was doubtful. For example, he found that the ledger folio revelant to the assessment year contained house hold expenses of the family as a whole. It was subsequently in the cash book that the assessee had apportioned the total house hold expenses of Rs. 9,065.81 among the five persons viz. Shri Kailash Narain, Smt. Basantibai, Shri Rajendra Kumar, Shri Madanlal Harikishan and Shri Satyanarain Harikishan. Account in the ledger file in the name of Shri Kailash Narain indicated opening balance of Rs.6,185.64. This was carried over t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penses of Rs. 1,950 and crediting share from alleged firm of Rs. 2893.47 corrected credit balance of Rs. 7702.85 was carried over to next year. Satyanarain LF-16 S.Y. 28-29 Revelant to Asst. yr. 1973-74 In the ledger for S.Y. 28-29 account of Satya Narain indicates credit figure of Rs. 6275.50 and subsequent additions. It has been stated that the figure of Rs. 6275.50 has been taken over to page19 of next years ledger. As a result of subsequent additions the balance in S.Y. 28-29 stands at Rs. 8182.10. However, in the ledger for S.Y. 29-30(LF 19) O.B. has been taken at Rs. 6275.50. Madanlal LF-12; S.Y. 28-29 Relevant to Asst. yr. 1973-74 In the ledger for S.Y. 28-29 credit balance of Rs. 1686.87 has been shown ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition in fact as claimed. Although a memorandum of partial partition had been produced before the ITO, he had concluded that the same was an after thought. According to the AAC, the ITO had no jurisdiction for holding likewise. His conclusion was based only upon the common entry about the expenses. By the partition only portion of the family assets had been divided and it was not necessary that each member should have started a separate messing and served his connections completely from the family. A family could still remain joint and in the case the expenses were transferred to the individual accounts of the partners later. He also found that the required evidence was contained in the books of accounts maintained by the HUF and such detai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. For example he has mentioned in his decision in appeal No. UC-23 76-77 that the factum of partition is also mentioned in the partnership deed and, therefore, could not be considered to be an after thought. This is factually incorrect and there is no such mention in the partnership deed. Similarly, in the other appeal No. UC-22 /76-77, he has stated that the lady Smt. Basantibai had maintained regular accounts in which she had recorded all the transaction made by her with the firm. Shri G.D. Atal representative of the assessee concealed that he had never argued that the lady had kept any accounts and observations of the AAC probably relate to some other case which was immediately heard before or after this case. We have, therefore, chosen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the alleged partition has not been referred to in it. 4. The only question that remains for our consideration is from when this partnership cams into existence. The partnership agreement was executed on 6th Sept., 72. But it purports to have been verbally made from Diwali 1971. From the above discussion made by the ITO it is obvious that there were no entries relating to this partnership business in the books before this agreement. Even the return filed by Shri Kailashnarain regarding his individual business for the earlier assessment year was done on 6th Oct., 1972 i.e. After the execution of the partnership deed. Similarly, it was conceded before us by Shri Atal, the representative of the assessee, that the so called partnership remain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... behalf reference was made to the commentary at page 611 of the Law Practice of Income tax of Kanga Palkhivala (7th 1976 Edition) that the burden of proving the source and nature of certain sums of cash received, during the accounting year, is upon the assessee and reference had been made by the learned commentator to Kalekhan Md. Hanif vs. CIT(2). The onus is upon the assessee to explain the nature and source of these cash credits. Reference may, also be made to the decision of Patna High Court in Hardwarmal Onkarmal vs. CIT(3) and the decision of the Calcutta High Court in Shankar Industries vs. CIT, Central Calcutta(4) wherein it has been further observed that the proof of a transaction resulting in a cash credit in the books of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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