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TMI Blog1985 (5) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... also cement sheets. . Iron goods Cement sheets Sales Rs. 6,66,570 Rs. 3,91,788 G.P. Rs. 66,657 Rs. 11,753 G. P. percentage 1per cent 3per cent The assessee does not maintain any stock register but stock tally is prepared on the basis of purchase and sale vouchers. Survey under s. 133A was conducted on the assessee s premises on 1st May 1979 and on 18th June 1979. On 1st May 1979 on certain items shortages were found and it was explained by the assessee that some of the stocks are lying in the godown of M/s Ambica Iron Trading Co. simultaneous raid was conducted on the firm M/s Ambica Iron Trading Co. on 1st May 1979 and certain stocks as belonging t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat books are written up regularly. The assessee has stated that the Munim had gone out of station and therefore, the cash books was not upto date. 3.2 Again on 18th June, 1979, the Officer found that the cash book was written only upto 14th June, 1979. The Officer then tried to tally the cash in hand by a rough method i.e. to the closing balance of cash on 14th June, 1979, the sales upto 18th June 1979 was added and the purchases were deducted and the opening cash balance was arrived at Rs. 25,000 while the cash in and was Rs. 24,563.87. He accordingly concluded that shortage of Rs. 436 remained unexplained. The conclusion was made that books are not written up regularly, stocks, are not tallied, stock register is not maintained and thus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e had accepted the weight s of items to be correct on the date of survey is also improper. Referring to the question as well as the answer (reproduced earlier) it is clear beyond any doubt that what the assessee has accepted is the quantity mentioned in the inventory and quantity and weights are altogether two different items but however, the assessee has not provided any statement relating to the quantity and weights to support his contention that the stocks have been properly accounted for except that fall in gross profit as within variable limits. The G. P. rate on iron items was 8per cent in 1978-79, 10.8 per cent in 1979-80 and 10per cent in 1980-81. The g.p. if 8 per cent was accepted in appeal and therefore, while comparing the g.p. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear in question there were four partners viz., Siri Giril Raj, Shri Mahesh Kumar, Smt. Bhanwari Devi and Smt. Indu Bala. During the year Smt. Bhanwari Devi retired and Shri Mahesh Kumar as Karta of his HUF became the partner. 11. The ITO s view was that since Shri Mahesh Kumar was only one person though having dual capacity as an individual as also as the Karta of his HUF, it tantamount to partnership of only one person and therefore, the partnership was invalid. 12. The AAC s view was the same as that of the ITO. 13. The ld. authorised representative of the assessee relied on CIT vs. Budhlal Amolak Das (1981) 129 ITR 97 (Guj), CIT vs. Raghavji Anadji Co. (1975) 100 ITR 246 (Bom), G. Ekambuerappa, G. Ors. vs. Excess Profit Tax Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son can be partner in only one capacity as an individual though he may be representing his HUF or other person. The dual capacity has also been recognised but has been clarified to mean that a partner is an individual as far as the other partners are concerned and may be responsible to account for the profits to other members of the HUF but he cannot be said to possessing the dual capacity vis-a-vis the other partners. This principle has been recognised by the Courts in the case of R. B. Loknath Prasad vs. CIT (1940) 8 ITR 369 (Pat) which principle had been approved by the Privy Council in the case of Lakshman Das vs. CIT (1948) 16 ITR 35 (PC). 16.1 In the case of CIT vs. Raghavji Anadji Co. (1975) 100 ITR 246 (Bom), the principle enume ..... X X X X Extracts X X X X X X X X Extracts X X X X
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