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TMI Blog2021 (12) TMI 1348X X X X Extracts X X X X X X X X Extracts X X X X ..... name of the partnership firm along with partners was appearing. It was discernible from the seized document that there was withdrawal of money from the partnership firm. Generally, the withdrawal from the firm represents the withdrawal of the capital by the partners. This capital can either be in the form of money contributed by the partner or maybe the share of profit/remuneration/interest on the capital of the partner generated from the partnership firm. Likewise, all these transactions should have been duly recorded in the books of accounts of the firm as well as in the individual ledger of the partners maintained by the firm. But, on perusal of the financial statement of the firm and the capital account of the partners, we note that such figures are not appearing herein. The necessary details of the financial statement of the assessee and capital account of the partners. Thus, we find difficult to believe the version of the assessee that the impugned withdrawal represents the settlement of the partners account in their individual capacity. Addition was not made solely on the basis of the statement recorded in the course of search of Shri Lialchand Patel the father-in-law of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Ld. CIT(A) ought not to have upheld the addition of Rs.61,01,104/- 2.3 The Ld.CIT (A) has erred in upholding that the appellant had failed to prove by producing the evidence that the impugned amount belonged to the firm and the partners had withdrawn from it so that it was not liable to tax. It is, therefore, prayed that the addition of Rs. 61,01,104/- upheld by the CIT(A) may kindly be deleted. 3. The interconnected issue raised by the assessee is that the learned CIT (A) erred in confirming the addition of Rs. 61,01,104/- on account of undisclosed income. 4. The facts in brief are that the assessee in the present case is a partnership firm and engaged in the business of Share trading Investment. The firm comprises four partners namely Shri Mukesh R Modi, Shri Kaushik P Patel, Shri Rakesh Patel and Shri Himanshu Patel. Some dispute happened among the partners on account of the fraud committed by the partners namely Mukesh R Modi and Shri Kaushikbhai P Patel. As a result of dispute among the partners, the remaining partners proposed to retire from the firm. Accordingly, a settlement deed was made among all the partners in writing dated 14 February 2004 in the prese ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he balance sheet, profit loss account, capital account of the partners, and other ledgers for the year under consideration and the bank statement for the period from 2001 to 2004. Based on these financial statements, it was contended that the amount of withdrawal shown in seized paper have no bearing on the income of the assessee firm. As such the amount represent the understanding between partners in relation to their personal share trading and outstanding amount of outside customer brought by them on which assessee firm earned only brokerage. As per the assessee, the aforesaid details i.e. the profit and loss account and statement of income filed establish the fact that firm has not earned such income. Therefore the AO was wrong in treating the same as distribution of profit of firm among partners. Further it is nowhere written on the seized document that the amount related to the year under consideration. The assessee also submitted reconciliation statement of profit loss account and bank statement. 5.3 The assessee also contended that the document seized from the premises of the 3rd party namely Shri Lilachand Patel in the search proceeding in case of Vimal Group being a thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt found and statement furnished by the Shri Lilachand Patel that amount represents distribution of profit between partners. 6. Being aggrieved by the order of the learned CIT (A), the assessee is in appeal before us. 7. The learned AR before us filed a paper book running from pages 1 to 283 and contended that the documents found in the course of such from the 3rd party do not belong to the assessee. Therefore, proceedings under section 153C of the Act cannot be initiated. 7.1 The learned AR also submitted that the amount of withdrawal shown in the seized document does not represent the income of the assessee. As such, the transactions recorded in the seized document represent the personal transactions of the partners which do not have any bearing on the income of the firm. 7.2 The learned AR also contended that there was no opportunity of cross verification extended to the assessee of the statement of Shri Lialchand Patel the father-in-law of Shri Himanshu Patel one of the partner of the firm. 7.3 The learned AR also contended that the onus lies upon the Revenue under the provisions of section 153C of the Act to justify that the transactions recorded in the seized d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... presumption is rebuttable by the assessee based on the documentary evidence. The relevant provisions of section 292 reads as under: 292C. (1) Where any books of account, other documents, money, bullion, jewellery or other valuable article or thing are or is found in the possession or control of any person in the course of a search under section 132 or survey under section 133A, it may, in any proceeding under this Act, be presumed- (i) XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX ii) that the contents of such books of account and other documents are true; and 9.3 In view of the above, there remains no ambiguity that the onus lies upon the assessee to prove that the transactions shown in the seized paper do not represent the true contents. 9.4 On examination of the seized document, we note that it was duly signed and dated not only by all the partners but also by three witnesses. The name of the partnership firm along with partners was appearing. It was discernible from the seized document that there was withdrawal of money from the partnership firm. Generally, the withdrawal from the firm represents the withdrawal of the capital by the partners. This ..... X X X X Extracts X X X X X X X X Extracts X X X X
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