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TMI Blog1991 (1) TMI 180X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the case of M/s Jay Jagdish Corporation, Respondent (ITA No. 1984/Ahd/87). Since both the composite appeals involve the same inter-mixed facts and circumstances, the appreciation of which is necessary in and for the just decisions of both the appeals, these are being decided by this consolidated order. 2. Facts, relevant and material for the decision of these composite appeals, are these: (A)CONSTITUTION OF RESPONDENT FIRMS 2.1 M/s Shree Gita Tea Trading Co. (ITA No. 1983/Ahd/87): This is a partnership firm engaged in the business of tea on wholesale basis with the principal place of its business at 4, Vinul Estate, Near Pragati High School, Khokhra Mehmadabad, Ahmedabad. It had come into existence w.e.f. 8th August, 1978 under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Dass Ugrichand Shah 4. Krishnaben alias Krishna Kantaben Arvindbhai Shah. Following minors had also been admitted to the benefits of the partnership: Name of minor Date of Majority 1. Minor Rajesh N. Shah 18-5-1980 2. Minor Sanjay D. Shah 17-10-1981 3. Minor Sandip D. Shah 17-10-1981 Under partnership deed dt. 15th July, 1980, effective from 1st July, 1980, along with the above named four partners, minor Rajesh N. Shah elected to become and hence became the fifth and Smt. Hiraben Kanti Lal Shah the 6th partner in this firm. Yet under partnership deed dt. 11th March, 1982 effective from 18th Oct., 1981 alongwith the six above named partners, Sri Sanjay D. Shah became the 7th partner on attaining majority on 17th Oct., 1981. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of reducing or minimising the tax liability of Shree Gita Trading Co. and other cases of the same group. In arriving at this conclusion the ITO had particularly taken note of the following facts: (1) Sources of capital contribution in the firm of M/s Jay Jagdish Corpn. by the partners are the funds available with Gujarat Tax Depot group of cases, mostly by way of gifts made by relations of the partners in the firms of the same group. (2) M/s Jay Jagdish Corpn. had in fact, never taken delivery of any goods from M/s Shree Gita Tea Trading Co. (3) The partners of M/s Jay Jagdish Corpn. were closely connected with the partners of M/s Shree Gita Tea Trading Co. 4. He, therefore, held that M/s Jay Jagdish Corpn. was simply a sham and b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at lower rates was sold at higher rates by M/s Jay Jagdish Trading Corporation, almost on the same day, to other sister concerns in the same group. 7. In reply it has been submitted that in immediately preceding two years M/s Jay Jagdish Trading Co. was assessed as a genuine firm on the profits of its own, that in the year under consideration also the said firm was assessed on other income derived by it from its own business. Thus the order under appeal was fully supported. 8. After having given our thoughtful consideration to the facts obtaining in the two cases, we are convinced that the orders under appeal call for no interference. Admittedly both the firms were brought into existence at different points of time, are having the place ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Form No. 11 & 11A, duly supported with the relevant partnership deed, in time and in order, the ITO refused registration in the case of M/s Shree Gita Tea Trading Co. on the grounds that (1) part of profits of this firm were diverted to M/s Jay Jagdish Corporation, which had been held by him as a sham concern and (ii) Shri P.O. Desai HUF, one of the partners in this firm, was in fact benami for another HUF known as O.N. Desai, HUF. 10. In appeal, the CIT(A), as held above, rejected the first contention of the ITO and found M/s Jay Jagdish Corpn. as a genuine firm. On the second ground he held that P.O. Desai HUF and O.N. Desai HUF were not two separate entities. He found that prior to asst. yr. 1979-80 the HUF of Shri O.N. Desai was par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in M/s Shree Gita Tea Trading Co. during the relevant periods. Therefore, no question of a partner being benamidar of another partner or a third person arose. The material placed on our record also supports the facts found by the CIT(A).
15. It is not disputed that assessments in the cases of the partners on income derived by them from their respective partnerships had already been completed, before assessments in the cases of the partnership. No evidence of action under ss. 263, 155 etc. dislodging that position has been placed before us. Assessee's arguments in that behalf cannot, therefore, be rejected outright, in view of the ratio in the decision relied upon.
16. In the result, both the appeals are dismissed. X X X X Extracts X X X X X X X X Extracts X X X X
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