9911796707
TMI Blog1998 (1) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... . 3. The learned CIT(A) has erred in law and facts in holding that cases decided by Tribunal, Amritsar Bench, Amritsar, quoted and referred by assessee during hearing did not have the similarities with the facts of assessee's case. 4. The learned CIT(A) has erred in law and facts by not taking into consideration the factum of non-compliance of directions under s. 144A." 2. The AO has observed that part of Arhat received by the appellant was credited in the books of account of Gulab Singh Co., Gulab Singh Co. is a trust floated by Joginder Singh S/o Gobind Singh of Ludhiana on 10th Aug., 1982 which has been settled with corpus of Rs. 5000 and Pritam Singh was appointed trustee, for the benefit of relatives of the partners of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er application was received from Mr. Mangal wherein he stated that the case may be adjourned after 25th Jan., 1986 due to disturbed conditions prevailing in the State. The case was accordingly fixed on 25th Feb., 1986 when Mangal appeared again and filed copy of account of Sewa Singh Co. in the books of Gulab Singh Co., Kotkapura. Its perusal showed that there are number of adjustment entries with Sewa Singh Co. Kotkapura. The assessee also filed the aforesaid copy of account with you. In order to verify the nature of these adjustment entries, he was asked to file detailed of such adjustment entries in the books of Gulab Singh Co. and of Zamidars in the books of Gulab Company and Sewa Singh Co., relating to the aforesaid adjustmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cent share. No doubt, the agriculturists are at liberty to sell their produce to whichever concern they think fit, but it is seen that payment on account of produce sold through Gulab Co. was made invariably by Sewa Singh Co. as and when it received the payments from the market. Thus, business to the tune of Rs. 17,88,677 was carried out through Sewa Singh Co. The accounts of Gulab Singh Co. have also been written by Bahadur Singh who is a paid employee of Sewa Singh Co. (c) The interlacing and inter-locking of funds is very clear from the examination of the copy of account of Sewa Singh Co. as appearing in the books of Gulab Singh Co. The copy of account pertains to the period 6th Sept., 1982, to 31st March, 1983. The cop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 78.56 — . . 8,32,602.00 5,464.24 Gulab Co. subsequently adjusted the amount after the payment was received from the market. Thus, it is clear that Gulab Co. carried out the business mainly with the funds of Sewa Singh Co., and the finding of the ITO that there was interlacing and inter-locking of funds between the two concerns is based on solid reasons. In view of the foregoing discussion, addition of Rs. 44,173 is upheld." 4. The learned counsel of the appellant pleaded that the direction under s. 144A were not carried out by the AO. He filed a copy of the direction alongwith the written submission made by the appellant before the IAC. The learned counsel of the appellant submitted that Gul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant-company which has been diverted to the Gulab Co. The case law cited cannot be strictly applied, on the facts and circumstances of the case of the appellant. So far as the non-compliance of the direction under s. 144A is concerned, the appellant did not avail reasonable opportunity given by the IAC. However, the IAC directed the AO to look into the copy of accounts and decide the issue accordingly. The CIT(A) has also adjudicated upon the nature of entries and discussed in his decision on the issue. We have perused the copy of account of the appellant and copy of account of Gulab Co. It is abundantly clear that the main income of Gulab Co. is from Dami i.e., commission. In the interest income, there is loss of very petty amo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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