1978 (8) TMI 54

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..... h was constituted in Diwali, 1968. His share in the firm was 27%. On November 7, 1968, he gave 11 engines and some other spare parts to the firm of the total value of Rs. 40,000. This was his capital contribution to the firm. He also gave a cash deposit of Rs. 6,000 to the firm on June 4, 1969. The ITO, while computing the income for the assessment year 1970-71, required the assessee to explain th .....

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..... owing question of law for our opinion : " Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that section 68 of the Income-tax Act and not section 69 was applicable and on that basis in upholding the addition in assessment year 1970-71 ? " Section 68 reads : " 68. Where any sum is found credited in the books of an assessee maintained for any .....

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..... ing as much an entity liable to assessment independently of the individuals who may constitute its partners. When s. 68 uses the term " books of an assessee ", it refers to the assessee whose books show the cash credit entry. In the case of the firm, the books maintained by the firm should show a cash credit entry and the firm's explanation should be found unsatisfactory, then only s. 68 will enti .....

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..... essee offers no explanation about the nature and source of the investments or the explanation offered by him is not, in the opinion of the Income-tax Officer, satisfactory, the value of the investments may be deemed to be the income of the assessee of such financial year. " In the present case, the assessee had made investments. Those investments were not in fact found recorded in his books of .....

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..... The Tribunal has, however, not given any finding on this aspect. This finding is also not the subject-matter of the question referred to us. We, therefore, leave the question open. In the result, we answer the question referred to us by holding that s. 69 was applicable to the facts of the case and the Tribunal was not justified in upholding the addition for the assessment year 1970-71 on the .....

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