9911796707
TMI Blog1983 (4) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... account of the HUF in the name of that partner in the books of account has to be added to the total income of the assessee in the computation. For this we place reliance upon our judgment in the case of M/s Gupta Mechanical Sundry Store in ITA Nos. 484 485 of 1981 dt. 16th March, 1983 and also ITA NO. 790 of 1979 dt. 16th April, 1981. This ground of the assessee is therefore, rejected. 4. Next ground in appeal is ground No. 16 in which the disallowance of Rs. 1000-out of the miscellaneous expenses is contested. We find that the total expenditure incurred by the assessee during year was Rs. 33,275. The ITO made the disallowance of this amount of Rs. 1000 merely because similar disallowance of Rs. 1000 had been confirmed by the CIT (A) for the asst. yr. 1976-77. However, we do not find any justification for disallowing the same amount this year without showing as to how this amount is not wholly and exclusively laid out for purposes of the business of the assessee. It is merely on estimate and without showing that there is an evidence for such an estimate. This addition of Rs. 1000 is therefore, deleted. 5. Now we come to ground No. 7. This ground is in fact related to gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es Corporation was constituted again of Shri G. M. Mehra, his two daughter-in-law Veena Mehra and Mrs. Puspa Mehra and son Arjun Kumar. There is no controversy about the fact that the three firms have their separate sales-tax numbers. They have independent bank accounts in which relevant constitutions as per relevant deeds of partnership constituting the three firms are indicated. The three firms have different tenancies in respect of their business premises from HUF of Shri G. M. Mehra. They have their independent and separate godowns differently located and numbered separately. Separate books of account are kept by each of the three firms. Respective partners of the three firms in the respective accounts of the firms maintained their separate profits and loss accounts in which profits and losses have been credited year after year. All the three partnership concerns are separately registered with the Registrar of firms. Though, the three firms are dealing in paper and board yet separate quality-wise stock details are maintained by each firm. The staff maintained by the three firms is separate and independent though once in a while, employees have gone from one firm to anther. All ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied upon, the appellant firm should be given an opportunity to rent the same." 10. It is this direction of the CIT (A) which is disputed by the assessee before us. The ld. counsel for the assessee besides narrating the above stated facts in brief, submitted that none of the partners of any of the three firms was examined. The action of the CIT (A) is nothing but gross violation of natural justice. He relied on the case of CIT vs. Sham Lal (1980) 18 CTR (P H) 89 : (1981) 127 ITR 816 (P H) and submitted that the action of the ITO in including the two amounts should have been annulled rather than the CIT (A) setting aside the matter and improving upon the order of the ITO for the purpose of framing a fresh assessment. He also submitted that partial setting aside is not very much approved by the Courts. The CIT (A) was not justified in setting aside the assessment pertaining to this issue, namely inclusion of assessed incomes of M/s Rajindra Trading Co. and M/s Mehra Sales Corporation in the hands of the assessee. 11. The ld. Departmental Representative, on the other hand, mainly relied on the order of the CIT (A) and went through para 10 of it and submitted that there was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere to accept the contention of the Revenue in respect of he alternative plea raised by the assessee partaining to partial setting aside, the finding of the CIT (A) in the instant case cannot be confirmed because of the overwhelming evidence in support of the assessee's contention. Then we have a Punjab and Haryana High Court decision in the case of Sham Lal relied upon by the assessee. This case supports the contention of the assessee directly on all fours. In this case certain amounts were included in the hands of the assessee on the basis that he was a partner. In the first appeal, the AAC an bulled the assessment because he found that the assessee was not a partner in the firm and the ITO had relied on certain material, which had not been put to the assessee, for coming to the conclusion that he was a partner. In the course of second appeal, the Tribunal also found that the amounts assessed in the hands of the assessee as his share of income from the firm was based on material placed on record in violation of the principles of natural justice and in fact there was no evidence to come to the conclusion that the assessee was a partner in the firm and hence the Revenue's appeal wa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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