9911796707
TMI Blog1987 (10) TMI 107X X X X Extracts X X X X X X X X Extracts X X X X ..... mely, Svs. Bhohrila, Sagarmal, Kanhaiyalal and Shri Gautamlal. On 2nd Sept., 1977, by means of a Partner ship deed a firm by name M/s Oswal Traders was floated, which comprised of five partners They were : Svs. Vinod Kumar, Smt.. Sajjan Bai, Smt.. Chandrakala, Smt. Dikhousbai and Smt. Kusum Bai. The ld. Departmental Representative submitted that Vinod Kumar was student at the time of formation of partnership and he was son of one of the partners of the assessee firm. The other four lady partners were wives of the partners of the assessee firm. A survey was conducted on 28th July, 1980 in the premises of the assessee firm. In the survey, the letterheads of M/s Oswal Traders were found and in one of the letters dt. 31st Oct., 1977, it was not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. In the reassessment so made, the ITO had again come to the same conclusion. The CIT(A) was of the view that the finding of the cash books of the two firms at the place of business of the assessee is not all serious. The CIT(A) was also of the view that it is natural phenomenon for the elders in the family to help the younger members in the initial stages of setting up of the business and it was with this intention only that in the first few days of the starting, the partners of the firm had helped the partners of M/s Oswal Traders, he was also of the view that Shri Sagarmal was entrusted as a Manager of the firm and that it was only two occasions the order for and on behalf of the assessee firm were booked by him. The CIT(A) also observe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f partners etc. The plea of the ld. Counsel for the assessee was that M/s Oswal Traders had obtained registration from Registrar of Firms and that had also obtained the necessary sales-tax No. from the sales-tax authorities. They had opened separate bank accounts. They re also being assessed to sales-tax which assessment have been provided at pp. 27 to 31. The copies of the partners account of M/s Oswal Traders are at p. 31 onwards which clearly indicate the quantum of profit, capital contributed and also the withdrawals by them. The plea further was that M/s. Oswal Traders had separate premises and their employees were separate. Referring to the statements of the ladies, which have been filed at pp. 13 to 16, he submitted that the ladies c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Traders is part of the assessee. It is also wrong on the part of the Department to claim that the family members of the Karta specially lady members are not entitled to carry on any separate business and if they do carry on any business then to say that it is only a front or a diversion of the assessee's business would be conjecture. The courts have severely condemned such as action based merely on the premises of relationship. It was also pleaded that it is not the case of the Department that the purchases and sales of M/s Oswal Traders were routed through the assessee firm or there were interlacing and interlocking of funds. The courts have held that even where the same partners floated another concern and carry on similar business then ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eparate, there were separate employees and separate sales-tax registration. The other undisputed fact is that the business transactions were totally distinct and separate from that of the assessee firm and that there was no interlacing or interlocking of the funds between the assessee firm and M/s Oswal Traders. Soon after the start of the business when Vinod Kumar realised that M/s Oswal Traders was mentioned as the branch of the assessee firm, he had immediately sent a letter to that party in which he had clearly stated that M/s Oswal Traders was not a branch of the assessee firm but a separate concern in its own right. The copy of the bank certificate indicated the names of partners of Oswal Traders and also who authorised to operate the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his by itself would not be sufficient to come to a conclusion that the firm is not a genuine one Whenever a doubt arises, it needs to be examined and a finding has to be provided for with evidences, which could be established that the doubt which was caused has no facts to be a reality. In the instant case, there is absolutely on such finding available or there is no evidence that is placed on record by which it could be concluded that CIT(A) had not properly examined or had come to a wrong conclusion without examining certain facts. Even these are absent in the instant case. The various case laws cited by the assessee and that of the Department only lay down the principles which have been observed by us above and, rather, our observed by v ..... X X X X Extracts X X X X X X X X Extracts X X X X
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