SURENDRA MAHAN SETH Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) AT the instance of the assessee, the Income-tax Appellate Tribunal referred the following question to this court for its opinion :

(2.) FROM a perusal of the statement of the case, it clearly appears that the deposits had been made by the partners on the very first day when the partnership firm came into existence. The question for consideration is whether such deposits can be taken to be the income of the assessee-firm. A similar question came up for consideration before this court in Income-tax Reference No. 152 of 1990--India Rice Mills v. CIT [1996] 218 ITR 508, and then this court held that the onus was on the partners to explain the source of the deposits made on the very first day when they entered into partnership and if they failed, the amount could have been added in their hands only and not in the hands of the assessee-firm.