9911796707
TMI Blog1988 (7) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee is a partner, to explain the source of cash credits of Rs. 35,601 and in that view reducing the addition by Rs. 20,000 ?" The facts relating to this reference are stated hereinafter. In the relevant assessment for the assessment year 1967-68, the total income of the assessee was computed at Rs. 1,21,670 inclusive of Rs. 47,374. He was a partner of five firms, namely, Biswanath Dutta, Biswanath Dutta and Co., Biswanath Cold Storage, Kashinath Cold Storage and Ashutosh Cold Storage. In the course of the assessment proceedings, the Income-tax Officer noticed in the assessee's personal account with Biswanath Cold Storage credit of Rs. 11,713. This sum was claimed to represent the assessee's share in the intangible addition of Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner upheld the addition of the entire amount. It was contended before him on behalf of the assessee that in the assessment of Biswanath Cold Storage, a sum of Rs. 50,000 was included after being disclosed by the said firm as representing bogus hundi loans. The disputed amount of Rs. 11,713 was claimed to represent the assessee's share in the said sum of Rs. 50,000. According to the Appellate Assistant Commissioner, unless the said sum of Rs. 50,000 was allocated among the partners, the assessee, being a partner, should not be deemed to be in possession of an equivalent amount representing his share of the firm's assessed income. The addition was, therefore, upheld. As regards the balance, the Appellate Assistant Commissioner, after discu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said sum of Rs. 50,000 was distributed amongst the four partners in their respective profit sharing ratio and credited in their respective capital accounts. Since the same amount could not be assessed twice as income, the Tribunal deleted the addition of Rs. 11,713. In regard to the disputed sum of Rs. 35,601, it was the assessee's case before the Tribunal that he was entitled to the benefits of intangible additions made in the past assessments of the three firms out of the five firms of which he was the partner in the ratio of his share in the said three firms, for the purpose of explaining the nature and sources of the deposits either in his name or in the names of others which was owned up by him in the course of the assessment proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uestion is whether the assessee is entitled to claim the benefit of intangible additions or additions in respect of unexplained loans made in the accounts of the firms. In Anantharam Veerasinghaiah and Co. v. CIT [1980] 123 ITR 457, 462, the Supreme Court considered the nature and character of intangible additions and held thus : ". . . it can hardly be denied that when an 'intangible' addition is made to the book profits during an assessment proceeding, it is on the basis that the amount represented by that addition constitutes the undisclosed income of the assessee. That income, although commonly described as 'intangible', is as much a part of his real income as that disclosed by his account books. It has the same concrete existence. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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