9911796707
TMI Blog1982 (4) TMI 129X X X X Extracts X X X X X X X X Extracts X X X X ..... essee-firm, the ITO found that as on 1st April, 1974, i.e., the first day of the previous year relevant to the asst. yr. under appeal, there was a credit of Rs. 71,000 in the name of Shri Lal Chand. The ITO required the assessee to explain this credit. This credit in fact consisted of amounts claimed to have been received by the creditor from the following sources: (a) Rs. 35,000 were borrowed from S. Piara Singh C/o M/s Lal Chand Co., Khanna. I paid him Rs. 4,200 as interest. (b) Rs. 17,000 were borrowed from Shri Sat Paul, S/o Shri Walaiti Ram, Mohalla Ram Nagar, Samana. I paid him Rs. 2,040 as interest. (c) Rs. 15,000 were borrowed from Sh. Bansi Dhar, Bahera Road, Patiala. I paid him Rs. 900 as interest. (d) Balance of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Present Shri Lal Chand states that Shri Bansi Dhar has since died. I have tried to locate his relatives. I have already filed proof regarding the interest paid. No relatives or other person who can produce his account books is available. I, therefore, surrender Rs. 15,000 subject to no penal action. Sd/- (Lal Chand)" The ITO framed the impugned assessment on 10th March, 1978. In the assessment order he has not referred to the letter written by Shri Lal Chand on 13th Nov., 1977 explaining the capital contribution of Rs. 71,000. However, he has observed in the impugned assessment order that, "there was a cash credit of Rs. 15,000 in the account of Shri Lal Chand, partner. When he was asked to prove the same, with documentary and conclus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... understood by both the parties in the same sense because Shri Lal Chand had stated that, "I, therefore, what he meant thereby was that if this amount was to be considered, it may be added in his assessment." That cannot be made the basis for an addition of Rs. 15,000 to the total income of the firm. 7. Shri Gupta attempted to place on record of the Tribunal stamped receipts showing that this Rs. 15,000 had existed earlier and it can be attributed to the party from whom it was shown to have come in the explanation given by Shri Lal Chand vide letter dt. 13th Nov., 1977. However, in fairness, he conceded that this evidence was not produced before any of the authorities below. The Tribunal considered this and rejected the evidence as not r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee submitted that there is some incongruity in the order-sheet entry dt. 27th Oct., 1977 which has been attributed to the letter of Shri Lal Chand dt. 13th Nov., 1977 and the letter of the ITO dt. 15th Nov., 1977 which was served upon the assessee on that very date. Therefore, the silence of the authorities below with regard to letter dt. 13th Nov., 1977 by Shri Lal Chand and the agreement on the order-sheet dt. 8th March, 1978 is conspicuous. It is clear that the ITO and Shri Lal Chand in so far as the order-sheet entry dt. 8th March, 1978 is concerned, did not understand the same thing in the same sense because in the said letter dt. 13th Nov., 1977 Shri Lal Chand had very clearly stated that the amounts which are forming the capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 71,000 and Rs. 15,000 nowhere appeared in the books of account as cash credit as projected by the ITO. Therefore, the onus of proving a cash credit in the partner's account as such does not have any application in this case. 12. Partner Lal Chand contributed Rs. 71,000 as capital on the first day of the previous year of the firm for which the assessment year under appeal is the first assessment year. It is, therefore, clear that on first day itself the firm could not have earned income and out of it contributed anything by way of share of Lal Chand to the extent of Rs. 15,000 which he had to explain as coming by way of cash credit in his account. In this regard one may draw benefit from the judgment of the Hon'ble Supreme Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
