INCOME TAX OFFICER Vs. SITA RAM TEKRIWAL, HUF.

JUDGEMENT

(1.) PER Shri Prakash Narain, Accountant Member - The only contention in this appeal is that the AAC had erred in deleting the addition of Rs. 61,282 made under Sec. 41(2) and Rs. 13,324 made under Sec. 45 of the Income Tax Act, 1961 (the Act).

(2.) THE assessee is an HUF. He was a partner in the firm of Vijai Picture Palace represented through its karta, Shri Sita Ram Tekriwal. The other partner was Shri Ram Kishan Tekriwal. The firm was running a cinema in Gorakhpur. Some dispites arose between the above two partners, as a result of which the cinema remained closed from 20 -10 -1971 to 30 -3 -1972. Subsequently, on 28 -3 -1972, an agreement was arrived at between the above two partners. As a result of this agreement, the firm was dissolved on the above date. It was further decided that Shri Sita Ram Tekriwal will sell his half interest in the assets of the firm to Smt. Chameli Devi wife of Shri Ram Kishan Tekriwal and Smt. Lalita Devi daughter -in -law of Shri Ram Kishan Tekriwal. The assessee was to receive a sum of Rs. 75,000 on this sale. Besides, his debit balance with the above firm was also wiped off.

(3.) THE above arrangement was put through two different documents executed on the same date, i.e., 28 -3 -1982. One was deed of dissolution and the other was sale deed. We will refer to these documents again in our this order. In its books of account, the assessee debited two sums of Rs. 56,182 and Rs. 75,000 being the debit balance from Vijay Picture Place. The aggregate of the two sums being Rs. 1,31,182 was transferred by the assessee to its profit and loss account.