1978 (6) TMI 61

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..... the payments to various parties, on 10th Dec., 1970, the closing cash was only Rs. 2,626.73 paise. The ITO asked the firm to explain the source of these credits. It was stated that these amounts i.e. Rs. 5,000 each was declared in the returns filed by these minor partners as income from other sources. Since the minor cannot contract, the ITO held that their earning of income from other sources cannot be accepted. It was further explained that the amount credited in the name of each minor represented birth-day presents, festival presents and savings out of pocket money and sundry cash gifts of small amounts from relatives. It was stated that the firm had nothing to do with these deposits. The ITO rejected this explanation and added Rs. 20,0 .....

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..... o him cannot be lost by a later deletion of s. 274(2). Following that order we reject this plea. 7. On merits, however, the assessee has, in our opinion, a good case. So far as the addition for low income from the truck is concerned, it is a case of pure estimate. The law did not require the assessee to maintain the accounts for the year 1972-73 which is in appeal before us. In fact, the assessee had been assessed on estimate in all the earlier years and although the ITO has made an addition of Rs. 15,000 the Tribunal has sustained an addition on pure estimate, without any proof of concealment of income, penalty cannot be sustained. 8. As regards cash credits in the name of minors, the minors are not the sons of the two major partner. .....

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..... the minors. That apart, taking of instalments for payment of firm's tax by the partners does not mean that the partners, if they wanted could not gift the requisite amounts to the minors. from the mere fact of taking instalments, that conclusion does not necessarily follow. 9. The position, therefore, remains that in the books of the firm, a sum of Rs. 20,000 in the name of four minors admitted to the benefits of partnership was credited on 6th Dec., 1970 and 7th Dec., 1970 with the narration that the amount had been brought in by the guardian of the minors. There is nothing to indicate that the amount actually represented the income of the firm. In fact, if we take the argument of the learned IAC to the logical conclusion that the firm .....

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