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TMI Blog1995 (7) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... llowing 16 partners, having profit sharing ratio shown against each name: 1. Shri Ramniklal N. 4% 2. Shri Jayantilal N. 5% 3. Shri Vinodchandra N. 5% 4. Smt. Madhukantaben Vallabhdas 12% 5. Shri Saileshbhai Vallabhdas 7% 6. Shri Prafulchandra Hansraj (HUF) 8% 7. Shri Hansrajbhai Jivanlal 8% 8. Shri Chamanlal Jiwanlal HUF 8% 9. Smt. Krutikaben Chamanlal 8% 10. Smt. Piyush Kantilal 6% 11. Smt. Ilaben Mohanlal 5% 12. Pravinchandra Karsandas HUF 4% 13. Smt. Hansaben Vasantlal 5% 14. Smt. Ranjanben Laxmanbhai 5% 15. Shri Kantilal Jivanlal HUF 5% 6. Shri Dharmendra Girdharlal 5% . 100% In order to examine the genuineness of the assessee-firm the Assessing Officer required the firm to produce all the partners be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Narandas and Hansraj Jivanlal did not lead to hold that the partnership was a bogus firm. The learned CIT(A) emphasised that those two partners simply showed their ignorance about the names of all other partners and their respective capital contribution. The learned CIT(A) also relied upon a number of decisions, viz., (i) CIT vs. Krishna Mining Co. (1980) 15 CTR (AP) 203 (FB) : (1980) 122 ITR 362 (AP) (FB), P.A.C. Ratnaswamy Nadar & Sons vs. CIT (1962) 46 ITR 1148 (Mad), (iii) CIT vs. Sivakashi Match Exporting Co. (1964) 53 ITR 204 (SC) and (iv) CIT vs. R.S. Thangapalan (1969) 74 ITR 478 (Mad) and in particular the decision of Hon'ble Gujarat High Court in the case of Laxmichand Hirjibhai vs. CIT (1981) 21 CTR (Guj) 181 : (1981) 128 ITR 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot genuine and rightly took the status of the firm as unregistered. He urged to restore the orders of the Assessing Officer. 4. On the other hand, Shri J.P. Shah, the learned counsel of the assessee, strongly supported the order of the learned CIT(A). In the course of his arguments he submitted that the assessee could not produce all the partners because in one way or the other they were not available on the day fixed by the Assessing Officer. The learned counsel also said that the ignorance of the partners as to the entire activity of the firm would not necessarily lead to the fact that the firm was bogus. Generally, in partnership firms some are passive partners while others were active and so sleeping partners might not be well aware o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the statement of accounts that partners are not only partners in this firm but they are partners in various other firms also and they are even old IT assessees. No doubt, the assessee failed to produce some of the partners and even some of the partners gave some damaging statement but when we consider the entire facts and circumstances of the case including the assessments of those partners being already completed in which they have shown the share income from the assessee-firm we cannot doubt the genuineness of the assessee-firm. In our considered view, the order of the learned CIT(A) is justified and so we uphold it. 6. In ITA No. 3009/Ahd/1990 the dispute relates to addition of Rs. 1,75,000 to GP which the learned CIT(A) has dele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id not bring any material on record to prove that the payments made to sister concern for purchase of raw materials from them was excessive or unreasonable compared to the rate prevailing in the market. The learned CIT(A) considering those aspects deleted the addition. 7. We have heard the rival submissions and have gone through the appeal records. Of course, the learned Departmental Representative exerted to make out the case of the Revenue but he could not do so. In fact, before making any addition on ad hoc basis to GP, the books of accounts should have been rejected but that has not been done. From the findings of the learned CIT(A) it is manifest that the assessee maintained proper books of accounts an d even the same was duly audite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r he has found out any positive serious defects in the books of accounts. Even he has not tried to substantiate his contention that payments made to sister concern for purchase of raw material and giving sub-contracts concern for purchase of raw material and giving sub-contracts are not reasonable. He has simply stated that payment in cash and over payment cannot be ruled out. He has not brought any material on record to support his contentions. On the contrary from the facts available on record it is seen that no over payment has been made or extra favour shown to the sister concerns. I would, therefore, hold that addition made by the Assessing Officer is without any basis and evidence. The additions are based more on conjecture and imagin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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