9911796707
TMI Blog1988 (8) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... s a partnership firm. For the year under reference, initially it returned an income of Rs. 29,901. Later on, in the revised return, the income disclosed was Rs. 32,608. The Income-tax Officer completed the assessment of the assessee on a total income of Rs. 1,13,339. The difference was mainly due to the addition of bogus loans of Rs. 58,000 as "income from undisclosed sources" and disallowance of interest thereon of Rs. 13,850. Those loans stood in the books of the assessee in the names of certain persons. The partners of the assessee-firm filed disclosure petitions with the Commissioner of Incometax under section 271(4A) of the Act wherein the said loans were accepted by the partners as their own concealed income. The said disclosure petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the partners of the assessee-firm had admitted that the loans really belonged to them. As far as the assessee was concerned, the case of the assessee was that the loans were genuine as the same belonged to the partners, even if the loans did not belong to the partners in whose names the loans appeared in the books of account of the assessee. On these facts, it was for the Department to prove that the addition made by the Incometax Officer represented the income of the assessee and that it concealed the same or furnished inaccurate particulars thereof. Reliance was placed, in this connection, on the decision of the Supreme Court in the case of Anwar Ali [1970] 76 ITR 696. The Tribunal gave consideration to the above arguments and accepted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he firm must be carried on by the partners. In the course of such business activity of the firm, if the partners of the firm have made certain admissions regarding the loans appearing in the books of the firm, it cannot be said that such admission will not bind the partnership firm and that the partners will be treated separately. The Tribunal has taken too legalistic view in holding that there is no admission by the partnership. One has to look into the actual state of affairs. What is apparent is not real. The reality of the situation is that the partners introduced concealed income in the form of cash credits from third parties in the books of the firm. The firm had shown such cash credits in the books of account to be genuine loans and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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