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TMI Blog2012 (5) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 to 6 of grounds of appeal independently and it committed illegality in dismissing the appeal without recording any finding thereon – in favour of assessee. - INCOME TAX APPEAL No. - 60 of 2003 - - - Dated:- 20-4-2012 - Ashok Bhushan, Prakash Krishna, JJ. Petitioner Counsel :- Akhilesh Kumar,Rishi Raj Kapoor Respondent Counsel :- S.C.,A. Kumar,A.N. Mahajan,B. Agarwal,D. Awasthi,G. Krishna,S. Chopra (Delivered by Prakash Krishna, J.) The present appeal has been filed under section 260A of the Income Tax Act by the assessee relevant to the Assessment Year 1991-92 against the order dated 17.12.2002 passed by the Income Tax Appellate Tribunal, New Delhi in Appeal No.2618/DEL/98 whereby the appeal which was filed by the assessee was dismissed by the Tribunal. The background facts may be noticed in brief. The appellant is a registered partnership Firm constituted vide partnership deed dated 5th of July, 1990. The Firm was formed to carry on business of distributorship of medicines of M/s. Alembic Chemicals Work Co. Ltd. Baroda. Master Shishir Kumar Garg (minor) was admitted to the benefits of the partnership firm as partner who contributed his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid deposit in the capital account of the Firm. In response, Sri M.L. Garg father and guardian of the minor was produced. He filed cash flow statement of Shishir Garg for the assessment year 1989-1990 and 1990-91 and submitted that the minor was an income tax assessee. He stated that out of Rs.1,90,000/- Rs.1,03,000/- was received as cash loan in January, 1989 and the balance was his savings, gifts etc.. The explanation given by the father/guardian of the minor was not found satisfactory by the Assessing Officer nor by any of the appellate authorities. Shri R.R. Kapoor, learned counsel for the appellant, at this juncture submits that firstly, the authorities below were not justified in not accepting the explanation. Three ingredients with regard to the section 68 were satisfied. The identity of the person was proved. The creditworthiness and the source of money was also proved. In any view of the matter, even if the aforesaid amount is treated as unexplained cash credit, it could not be added in the income of the assessee firm as it was its first year of business and it could at the most be added at the hands of the minor partner. In reply, Shri Dhananjai Awasthi, learned c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rm. The learned counsel for the appellant submits that the aforesaid decision applies with full force to the facts of the case on hand. Noticeably, this was also a case where it was the first year of assessment of the Firm. The observations made therein if read in the context of the facts of the present case, the submission of the appellant's counsel is well founded. The relevant extract is reproduced below:- "It appears to be well settled that if there are cash credit entries in the books of the firm in which the accounts of the individual partners exist and, it is found as a fact that cash was received by the firm from its partners then in the absence of any material to indicate that they were profits of the firm, it could not be assessed in the hands of the firm. We are, therefore, of the opinion that the Tribunal did not commit any error of law and rightly held that the deposits shown in its accounts were satisfactorily explained." At this stage, the learned standing counsel for the department places reliance upon another Division Bench decision of this Court in the case of Kapur Brothers (supra). It is apt to examine the facts of the case of Kapur Brothers (supra). The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the assessee to explain the source of the deposits and as the assessee-firm failed to discharge that onus, the deposits were rightly taken to be the income of the assessee-firm from undisclosed sources by the assessing authority." xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx "Reliance on Kapur Brothers' case [1979] 118 ITR 741 (All) is misplaced, inasmuch as in that case deposits were entered in the books of the firm when it was already carrying on its business. The firm was called upon to explain the source of the deposits. The explanation of the firm was that the deposits represented the sale proceeds of certain assets belonging to the partners. When no evidence was adduced to substantiate that explanation, the assessing authority added the amount as income of the partnership-firm. These facts are materially different from the fact of the instant case. Most striking feature of the case on hand is that all the deposits came to be made during the accounting year in the books of the assessee-firm before it started its business. Therefore, the onus was on the partners to explain the source in the case on hand and if they failed, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same mistake and in this regard their orders cannot be allowed to stand. Question No.2 Now, we take up the question no.2. It is an acknowledged legal position that the Income Tax Appellate Tribunal is the highest fact finding authority. The findings returned by the Tribunal unless perverse or against the material on record are binding. A bare look to the order of the Tribunal under appeal would show that it contains 11 paragraphs. Up to paragraph 9, it has noticed the history of the case, the findings recorded by the authorities below to it as also the respective arguments of the counsel for the parties. Then, in para 10 it has reproduced a portion from the order of CIT (A) and in the last paragraph that is paragraph-11, it has dismissed the appeal with the following observation: "We find no infirmity in the order and have no hesitation in dismissing the appeal filed by the assessee." There is absolutely no discussion about the respective arguments of the counsel for the parties therein. It does not contain the points for determination and its findings thereon. Even an order of affirmation by a higher authority requires that the authority should give its own reason, m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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