COMMISSIONER OF INCOME TAX Vs. KAPUR BROTHERS

JUDGEMENT

(1.) WHILE making assessment of M/s. Kapoor Brothers, the assessee, the ITO found that a deposit of Rs. 2,015 was entered in the assessee's account books in the name of each of its five partners. The deposits were entered as on 20th October, 1966. The accounting period for the assessment year 1967-68 ended on 11th November, 1968. He called upon the assessee, a partnership firm, to explain the sources of these deposits. The firm put forward the explanation that these amounts represented the sale proceeds of certain assets belonging, to the partners. Since no evidence was produced, the same was rejected. The ITO added these amounts as the income of the partnership firm.

(2.) THE firm appealed. Before the AAC, it put forward a different explanation that tbe deposits represented sale proceeds of Banarsi sarees sold by the partners. This explanation was also found not believable and was rejected. THE addition was upheld.

(3.) WE have some difficulty in appreciating the observation of the Tribunal that if the explanation is not satisfactory or there is no evidence to support it, the deposit should be considered as the income of the partners. The deposits were entered in the account books of the firm. The firm was called upon to explain its source. The firm's case was that the money belonged to the partners but it was deposited with the firm.