9911796707
TMI Blog1994 (12) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... to determine the production. It was noted that the production was low and consumption of hard coke high in the months of September, October, November and December, 1987, and January, February, 1988. The Assessing Officer was of the view that the assessee had done certain work outside the books of account. The assessee's plea was that monthly consumption of hard coke was verifiable from the books and the production depended upon the quality of coke and raw materials. In certain months, the production was indeed low, though the consumption of hard coke was high. The assessee's explanation was, however, not accepted and the Assessing Officer adopted average production at 45% and calculated the production at 73.09 qtls. The rate of Rs. 600 per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly on suspicion that high consumption of coke in certain months was found to be improper. The work of foundry depended upon various factors, like quality of hard coke and raw materials as well as labour force, weather conditions, running of furnace, etc. 6. Looking to the entire facts, we are of the view that a variation in production and consumption of hard coke had been properly explained and there was no sufficient material on record to reject the results. It is correct that in certain months, the consumption of hard coke was high and production was low but the assessee gave plausible and valid explanation in this regard. We find no reason to sustain the addition only on a suspicion that the assessee had done production outside the bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he hands of the firm. 10. The assessee went in appeal with the plea that the firm was not a distinct legal entity and, in view of that the amount of capital gain was divided amongst the partners and was assessable in their hands. The appeal was, however, rejected. 11. The learned counsel has contended that though the property was owned by the firm but all the partners had interest in the asset of the firm and they were entitled to receive the capital gains as co-joint owners. It was for this reason that sale price was transferred to the capital account of the three partners. 12. The learned Departmental Representative has, in reply, contended that the land in question had been purchased by the firm and was duly shown in the balance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and, it appears from the said decision that the amount of capital gain was liable to be taxed in the hands of the partners. Our attention has next been drawn to a decision of the Punjab and Haryana High Court in the case of Pearl Woollen Mills vs. CIT (1980) 14 CTR (P H) 119 : (1980) 123 ITR 658 (P H). That was a case where the assessee-firm made some capital gain on the sale of spindles. It was held that the firm had no legal existence and the partnership property vested in all the partners. During the subsistence of partnership, no partner can, however, deal with any portion of the property as his own nor can he assign his interest in a specific item of the partnership property to anyone. His right is to obtain such profit, if any, as fel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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