9911796707
TMI Blog1996 (10) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... ees. Out of the six partners, two were adults and remaining four were minors represented by their guardian father. The consideration amount of Rs. 2,95,000 was drained out through the firm, National Cashew Corporation, Trivandrum. In fact, this Trivandrum firm had an account styled as "Hyderabad Account" showing debits of the payments and in spite thereof, correspondingly the grape garden was not shown as an asset of the firm. With regard to the assessment year 1969-70, the balance-sheet as on March 31, 1969, showed only Rs. 11,071 as due to the Trivandrum firm. This was as against the opening balance of Rs. 3,45,063. This revealed that the bulk of payments were made in the accounting year in question. Correspondingly, in the books of the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artners and not co-owners. This question was brought before this court resulting in an order of remand to the Tribunal for considering the question in the right perspective. The Tribunal reaching the finding that the income from the grape garden represented the assessees' income actually and, in fact, the assessees had given the colour of agricultural income to their otherwise taxable income. In the process of reasoning, the Tribunal reached the conclusion that the six assessees were co-owners. It was contended by the Revenue that the question, whether the assessees are partners or co-owners was really unnecessary. In the process of reasoning, after remand, the Tribunal reconsidered the whole matter. Observing that this court not havi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted the explanations offered by the assessees making it a situation of probability that the assessees might have earned the income estimated by them?" The Tribunal has also referred a question as a conditional one, depending on the answer to question No. 5 originally framed. For answering the said question, only to that extent, for the purpose of this judgment, we reproduce the said question (question No. 5) out of which flows the question framed as urged by the assessees. They are as follows : "5. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in allowing the assessee to raise a fresh ground about the legality of the penalty order in an order passed under section 260(1) of the Income-tax Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... papers of the said rectification application are placed before us. We find that the judgment in R. Leela Vasanth Nair's case [1987] 167 ITR 837 (Ker), is dated April 6, 1987, and the rectification application appears to have been rejected thereafter by the order dated September 3, 1987. Going through the order, it appears to us that the rectification application is rejected with an observation that the error is not apparent and there was some scope for a different impression regarding the High Court's order. All that we can say in the matter of this state of affairs is, that this is unfortunate. The Tribunal at least should have taken the trouble of going through the decision of this court, which was the basis for rectification applicatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of counsel appearing in the matter. Even earlier, in a similar situation, in I. T. R. Nos. 35 and 36 of 1990, CIT v. K. P. Varoo [1998] 229 ITR 667 (Ker), decided on July 5, 1996, the same course was adopted and we continue to adopt the same in regard to these two references. Consequently, we direct the Income-tax Appellate Tribunal to adopt the necessary proceedings to bring the heirs and legal representatives on record and to pass consequential orders to enable the Revenue to proceed with the recovery as a consequence thereof. A copy of this judgment, under the seal of this court and the signature of the Registrar, shall be forwarded to the Income-tax Appellate Tribunal, Cochin Bench, as required by law. - - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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