9911796707
TMI Blog1978 (6) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... amining the accounts the ITO noticed credits in the names of M/s. Kasturchand Baijnath and Gangadas Kothari for the sums of Rs. 50,000 and Rs. 1,00,000, respectively, both dated January 10, 1958. The assessee was required to prove the credits. A letter was filed from Kasturchand Baijnath confirming the loan. Gangadas Kothari was reported to be dead. Of course some purjas showing receipt and repayment were produced. Summons were issued to Kasturchand Baijnath for production of books of accounts, but there was no compliance. On 10th January, 1958, the opening balance of Rs. 1,00,000 in this account was repaid in cash but interest of Rs. 889.57 was paid by cheque and on that very day the sum of Rs. 50,000 was again shown in the account a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... odd and the credits under consideration were advances made by him out of the disclosed funds. The AAC did not accept the plea stating that this contention was not taken at the assessment stage nor at the earlier stages of the hearing of the appeal but only at the final hearing, i.e., 15th October, 1965. It was further observed by the AAC that it was impossible to accept that the income of Rs. 25 lakhs could have been earned without maintaining any accounts or contemporaneous records and whatever documents might be in existence were withheld from examination by the department. Such documents were of course not necessary for making the disclosure under the Finance Bill of 1965; the position was different if a firm wanted to take advantage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... correct or even probable when it was confronted with inconvenient position and it had taken advantage of the scheme formulated by the Government contained in section 68 of the Finance Act, which came handy, it is certainly entitled to do so and in fact there is no dispute about it. The scheme has not come into force prior to 1st April, 1965; the assessee was, therefore, trying to convince the department as best as it could on the basis of evidence available with it. After it became aware that it could not any longer convince the department with the data available with it and when the situation became too hot for it, one of its partners voluntarily came forward with the disclosure scheme and disclosed a sum of Rs. 25,06,000 as his undisclose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as inadmissible as evidence. We are unable to agree with the contentions of the departmental representative that the benefit of the scheme is available only to the person making the declaration and not to any others. Here is a case where a partner of the firm made a declaration that the amount credited in fictitious names in the firm belonged to him and paid taxes thereon and the firm submitting that in view of the admission made by the partner, the credits must be deemed to have been proved, and the amount did not belong to the firm. We, therefore, fail to understand how it could be said on these facts that the assessee is not entitled to rely upon the admission made by the partner in the disclosure petition. What is required by the firm t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... department with the available data and when the situation became too hot for it, one of the partners, namely, Ghanshyamdas Binani, came forward and disclosed a sum of Rs. 25,06,000 as his undisclosed income. After the above findings, the Tribunal also held that the partner disclosing the income clearly admitted in most unequivocal terms that the sums in question belonged to him and that position was accepted by the department when the disclosure petition was accepted. According to the Tribunal, the petition must have been accepted after enquiry and if the department did not do so, that could not turn up against the assessee. As the partner had admitted the cash credits as his own income and offered them for tax and paid tax thereon, it w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntary disclosure petition. Therefore, in view of the aforesaid inconsistent and contradictory findings of fact, the conclusion reached by the Tribunal that the assessee had fully explained the nature and source of the amounts is perverse, as its conclusion is based on the inconsistent and contradictory findings which cannot stand together and no reasonable man would come to such conclusion. Mr. Suhas Sen also argues that the Tribunal's finding that the department accepted the voluntary disclosure petition and the department must have made an enquiry also could not be supported in law. Under the scheme, there is no scope for acceptance or rejection of the disclosure. There is also no scope for making any enquiry. The statement as to discl ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
