Vishal Dixit, Lucknow V. ACIT, Lucknow

ITA 613/LKW/2009

• Counselvise Citation: 61323714 RSA 2009
• Duration Of Justice: 4 year(s) 11 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 10-09-2014
• Assessment Year: 1996-1997
• Appeal Filed On: 25-11-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K DEY
• Assessee Lawyers: R P TIWARI
• Keywords: Income from undisclosed sources; Peak credit
• Section: 68; 69; 12

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NOS.613 & 677/LKW/2009 A. YEARS:1996 - 97 & 1997 - 98 & I.T.A. NOS.91 TO 94/LKW/2010 A. YEARS:1998 - 99 TO 2001 - 02 SHRI VISHAL DIXIT, 210, VINAY PLACE, 11, ASHOK MARG, LUCKNOW. PAN:AFOPD8535Q VS. A.C.I.T., RANGE - IV, LUCKNOW. (APPELLANT) (RESPONDENT) APPELLANT BY SHRI R. P. TIWARI RESPONDENT BY SHRI P. K. DEY, D.R. DATE OF HEARING 10/09/2014 DATE OF PRONOUNCEMENT 1 4 /1 1 /2014 O R D E R PER A. K. GARODIA, A.M. ALL THESE SIX APPEALS ARE FILED BY THE ASSESSEE, WHICH ARE DIRECTED AGAINST SEPARATE ORDERS OF CIT(A) RELEVANT TO ASSESSMENT YEARS 1996 - 97 TO 2001 - 02. ALL THE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THES E ARE VERY OLD APPEALS, WHICH WERE LISTED FOR HEARING ON VARIOUS OCCASIONS. IN FACT , ADJOURNMENT WAS GRANTED TO LEARNED A.R. OF THE ASSESSEE ON LAST SEVERAL DATES WITH THE OBSERVATIONS LAST OPPORTUNITY I.E. ON 15/05/2014, 22/05/2014, 29/05/2014, 14/07/2014, 18/07/2014 AND 5/08/2014. ULTIMATELY THE HEARING WAS FIXED ON 10/09/2014 AND O N THIS 2 DATE ALSO, LEARNED A.R. OF THE ASSESSEE MOVED AN APPLICATION SEEKING ADJOURNMENT ON THE PLEA THAT SHRI J. J. MEHROTRA, WHO HAS TO REPRESENT THE CASE IS OUT OF STATION. SINCE THESE ARE OLD APPEALS AND SEVERAL OPPORTUNITIES HAVE ALREADY BEEN GRANTED, THIS APPLICATION FOR ADJOURNMENT WAS REJECTED AND THE APPEALS WERE HEARD AFTER HEARING LEARNED D.R. OF THE REVENUE AND THE ASSESSEE WAS GIVEN AN OP TION TO FILE WRITTEN SUBMISSIONS WITHIN ONE WEEK OF HEARING. THE LEARNED A.R. OF THE ASSESSEE HAS FILED WRI TTEN SUBMISSIONS ON 15/09/2014 AND HENCE, WE DECIDE THESE APPEALS AFTER CONSIDERING THIS WRITTEN SUBMISSIONS OF THE LEARNED AR OF THE ASSESSEE. 3. LEARNED D.R. OF THE REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 4. FIRST WE TAKE UP THE CERTAIN LEGAL PROPOSITIONS AS REPRODUCED BELOW RAISED BY THE LEARNED AR OF THE ASSESSEE IN HIS WRITTEN SUBMISSIONS FOR EACH OF THE YEARS. THESE LEGAL PROPOSITIONS ARE REPRODUCED BELOW: LEGAL PROPOSITIONS: 1. ADDITION OF UNEXPLAINED DEPOSIT OF CREDIT IN BANK ACCOUNT WHERE BOOKS OF ACCOUNT ARE NOT MAINTAINED. - NOT SUSTAINABLE. THE ASSESSEE - APPELLANT IS NOT MAINTAINING ANY BOOKS OF ACCOUNT WHICH FACT IS ON RECORD. THE ADDITION HAS BEEN MADE IN RESPECT OF DEPOSITS MADE IN THE BANK ACCOUNTS BOTH IN HIS 'INDIVIDUAL' BANK ACCOUNTS AS WELL AS IN THE BANK ACCOUNTS OF THE FIRM M/S DIXIT & CO.' OF WHICH HE WAS ONE OF THE PARTNERS. IT IS WELL SETTLED LAW THAT CREDIT ENTRIE S IN BANK PASSBOOK CANNOT BE ADDED AS UNEXPLAINED INCOME MORE 3 PARTICULARLY WHEN NO BOOKS OF ACCOUNT HAVE BEEN MAINTAINED AS BANK PASS BOOK CANNOT BE EQUATED WITH BOOKS OF ACCOUNT. FOR THE ABOVE PROPOSITION THE ASSESSEE - APPELLANT WOULD LIKE TO PLACE RELIAN CE ON THE FOLLOWING CASES: - I.T.O. VS. KAMAL KUMAR MISHRA 143 ITD 686 (LUCKNOW TRIBUNAL) IN PARA 9 OF THE SAID ORDER IT HAS BEEN HELD BY THE HON'BLE COURT AS FOLLOWS: - 'IN THE INSTANT CASE IT IS AN UNDISPUTED FACT THAT THE ASSESSEE HAS NOT MAINTAINED ANY BOOKS OF ACCOUNT AND WHATEVER CREDIT ENTRIES ARE FOUND BY THE A.O. IT WAS FROM THE BANK ACCOUNTS OF THE ASSESSEE IN WHICH DEPOSITS WERE MADE AT DIFFERENT POINT OF TIME. EVEN THE PASSBOOK ISSUED BY THE BANK CANNOT BE TERMED TO BE A BOOK OF THE ASSESSEE AS PER JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. BHAICHAND H. GANDHI 141 ITR 6 (BOM.) AND, THEREFORE, THE PROVISIONS OF SECTION 68 OF THE ACT CANNOT BE INVOKED ON VARIOUS DEPOSITS/CREDITS FOUND RECORDED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE IN THE ABSENCE OF BOOKS OF THE ASSESSEE MAINTAINED FOR THAT PREVIOUS YEAR.' THIS HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. BHAICHAND H. GANDHI 141 ITR 6 (BOM.) WHEREIN THE HON'BLE BOMBAY HIGH COURT HAS HELD THAT THE BANK PASS BOOK IS NOT A BOOK MAINTAINED BY THE ASSESSEE OR UNDER HIS INSTRUCTIONS AND CASH CREDITS FOR PREVIOUS YEAR SHOWN IN PASS BOOK CANNOT BE TREATED AS INCOME. PROPOSITION 2 ADDITION OF UNEXPLAINED INCOME OF AMOUNTS APPEARING AS CREDIT IN BANK STATEMENT OF FIRM 'M/S DIXI T & CO.' - NOT SUSTAINABLE. AS FAR ADDITION IN RESPECT OF CREDIT ENTRIES IN PASSBOOK OF M/S DIXIT & CO., A PARTNERSHIP FIRM CANNOT BE MADE IN HANDS OF ASSESSEE WHO IS INDIVIDUAL . AS THE DEPOSITS IN THE ACCOUNT OF M/S. DIXIT & COMPANY ARE CONCERNED. M/S DIXIT & 4 COMPANY IS A SEPARATE PARTNERSHIP FIRM WHICH FACT IS EVIDENCED BY A DEED OF PARTNERSHIP DATED 07.09.1993 COPY OF WHICH IS ALREADY OBTAINED BY THE INCOME TAX DEPARTMENT FROM BANK. THE ASSESSING OFFICER WHILE FRAMING THE ORIGINAL ASSESSMENT HIMSELF HAD REQUISITIONED THE BANK ACCOUNTS OF M/S. DIXIT & COMPANY FROM THE BANK AND COPY OF THE PARTNERSHIP DEED WHICH FACT IS MENTIONED BY HIM FINDS PLACE IN HIS ORIGINAL ASSESSMENT ORDER WHICH FINDS PLACE IN SUPPLEMENTARY PAPER BOOK AT PAGE NO. 22 (12 L LINE FROM BOTTOM) WHEREIN THE NATURE OF BUSINESS HAS BEEN MENTIONED AS 'SERVICE JOB OF ADVOCACY' THUS, THERE CANNOT BE ANY DOUBT THAT THE APPELLANT VISHAL DIXIT IS A SEPARATE LEGAL ENTITY BEFORE THE DEPARTMENT WHILE M/S DIXIT & COMPAN Y IS A SEPARATE LEGAL ENTITY HI THE EYES OF LAW AS THE SAME COMPLIES ALL THE REQUIREMENTS AS REQUIRED BY THE PARTNERSHIP ACT, 1932 AND, THEREFORE, TWO SEPARATE ENTITIES CANNOT BE EQUATED FOR ONE ENTITY AND THERE IS NO JUSTIFICATION IN TREATING THE DEPOSITS IN THE BANK ACCOUNTS OF M/S. DIXIT & COMPANY AS DEPOSITS OF THE APPELLANT AND ADDING THE SAME AS UNDISCLOSED DEPOSITS IN THE HANDS OF THE APPELLANT. IT IS A WELL SETTLED LAW THAT IF CASH CREDITS ARE FOUND IN THE BOOKS OF THE FIRM THEY COULD NOT BE ADDED IN THE HANDS OF THE ASSESSEE. AS INCOME FROM UNDISCLOSED SOURCES. FOR THE ABOVE PROPOSITION, THE ASSESSEE - APPELLANT WOULD LIKE TO RELY ON THE FOLLOWING CASES: - ANAND RAM RAITANI VS. CIT 223 ITR 544 (GAU.) THE HON'BLE GAUHATI HIGH COURT HAS HELD THAT A PARTNERSHIP FIRM IS AN ASSESSABLE ENTITY DISTINGUISHED FROM INDIVIDUAL PARTNER. THE BOOKS OF ACCOUNT OF PARTNERSHIP CANNOT BE TREATED AS THOSE OF INDIVIDUAL PARTNER. REFERENCE HAS BEEN MADE TO THE BOOKS OF ACC OUNT OF THE FIRM STATING THAT CASE CREDITS HAVE BEEN FOUND AND THOSE WERE ADDED UNDER SECTION 68 OF THE ACT BY THE ASSESSING OFFICER REJECTING 5 ASSESSEE'S SUBMISSION THAT THE CASE CREDITS WERE GENUINE. THESE BOOKS OF ACCOUNT WERE NOT BOOKS OF ACCOUNT OF THE PARTNER AS CONTEMPLATED UNDER SECTION 68 OF THE ACT AND SECTION 68 WAS NOT APPLICABLE ON THE FACTS OF THE CASE. AS FAR AS THE ASSESSEE'S CASE IS CONCERNED, FIRST OF ALL THE ASSESSEE WOULD LIKE TO RELY ON THE PROPOSITION THAT THE BANK PASSBOOK IS NOT A PA RT OF BOOKS OF ACCOUNT AT ALL. ASSUMING THAT IT IS A PART OF BOOKS OF ACCOUNT THEN ALSO IF DEPOSIT IS FOUND IN THE BOOKS OF ACCOUNT 'OF THE FIRM, THE SAME CANNOT BE ADDED AS UNDISCLOSED INCOME OF THE PARTNER ASSESSEE UNDER - SECTION 68 OF THE INCOME TAX ACT . SIMILAR VIEW HAS BEEN TAKEN BY THE HON'BLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF: SHANTA DEVI (SMT.) VS. CIT 171 ITR 532 (P&H) THE HON'BLE PUNJAB & HARYANA HIGH COURT HAS TAKEN A SIMILAR VIEW ON THE FACTS WHICH ARE EXACTLY REPLICA OF THE FACTS OF THE ASSESSEE CASE. IN THE SAID CASE THE FIRM WAS MAINTAINING BOOKS OF ACCOUNT AND CASH CREDIT ENTRIES IN THE BOOKS OF THE FIRM WERE ADDED IN THE HANDS OF THE PARTNER WHO WAS NOT MAINTAINING ANY BOOKS OF ACCOUNT. THE HON'BLE PUNJAB AND HARYANA HIGH COU RT HELD THAT WHERE A PARTNER MAINTAINED NO BOOKS OF ACCOUNT AND CASH CREDIT ENTRY APPEARED IN THE BOOKS OF THE FIRM, THE AMOUNT OF THE CASH CREDIT COULD NOT BE ASSESSED AS INCOME FROM UNDISCLOSED SOURCES IN THE HANDS OF THE PARTNER TREATING THE BOOKS OF AC COUNT OF THE PARTNERSHIP FIRM AS THOSE OF INDIVIDUAL PARTNER. THE HON'BLE PUNJAB & HARYANA HIGH COURT HAS FOLLOWED THE JUDGMENT OF THE HON'BLE PATNA HIGH COURT IN THE CASE OF LAXMI NARAIN GUPTA VS. CIT 124 ITR 94. (PATNA) IN LIGHT OF THE ABOVE LEGAL POSI TION, THERE IS NO JUSTIFICATION OF THE DEPARTMENT IN TREATING THE DEPOSITS IN THE BANK PASS BOOK OF THE FIRM M/S DIXIT & COMPANY AS 6 UNEXPLAINED INCOME IN THE HANDS OF THE ASSESSEE WHO IS A SEPARATE LEGAL ENTITY. FURTHER THE ASSESSEE - APPELLANT WOULD LIKE TO FURTHER PLEAD THAT AT NO STAGE OF THE PROCEEDINGS THE DEPARTMENT HAS BROUGHT ANY NEXUS ON RECORD TO DEMONSTRATE AND SHOW THAT THE DEPOSITS IN THE BANK ACCOUNT OF THE FIRM WERE RELATED TO THE ASSESSEE - APPELLANT AND, THEREFORE, ALL THE MORE THERE IS NO JU STIFICATION TO TREAT THE SAME AS UNDISCLOSED INCOME OF THE ASSESSEE VISHAL DIXIT. PROPOSITION 3 PEAK CREDIT/TELESCOPING OF DEPOSITS/WITHDRAWAL. WITHOUT PREJUDICE TO PLEADINGS WITH REFERENCE TO THE FACT THAT NO ADDITION UNDER SECTION 68 CAN BE MADE IN THE HANDS OF THE ASSESSEE ONLY BASED ON CREDIT ENTRIES FOUND IN THE BANK PASS BOOK AND FURTHER PROPOSITION THAT IN ANY VIEW OF THE MATTER CREDIT ENTRIES APPEARING IN THE FIRM M/S. VISHAL DIXIT & COMPANY WHICH IS A SEPARATE ENTITY COULD NOT BE ADDED AS UNDISCL OSED INCOME IN THE HANDS OF THE ASSESSEE . THE ASSESSEE WOULD LIKE TO CANVASS THEORY OF PEAK CREDITS OR TELESCOPING. THE DEPARTMENT HAS NOT GIVEN ANY BENEFIT TO THE ASSESSEE OF PEAK CREDIT THEORY OR TELESCOPING THE ADDITIONS AND WITHDRAWALS FROM BANK ACCOU NT OF VISHAL DIXIT AND/ OR FROM THE BANK ACCOUNT OF M/S VISHAL DIXIT & COMPANY CONSOLIDATED. WE HAVE WORKED OUT A PEAK CREDIT BASED ON: DEPOSITS IN THE BANK ACCOUNT OF VISHAL DIXIT PEAK CREDIT OF WITHDRAWALS FROM BANK ACCOUNT PAPER BOOK PAGE 33 & 34 TO S HOW AVAILABILITY OF CASH. ONCE THE SOURCE OF INCOME HAS BEEN TREATED AS UNDISCLOSED INCOME OF THE ASSESSEE - APPELLANT, THE ASSESSEE SHOULD HAVE BEEN ALLOWED THE BENEFIT OF TELESCOPY OF AVAILABLE CASH PEAK CREDIT THEORY WHICH HAVE BEEN MADE APPLICABLE AND T HE MAXIMUM ADDITION WHICH COULD BE SUSTAINED WAS THE MAXIMUM PEAK CREDIT BALANCE BY BALANCING THE DEPOSITS AND WITHDRAWALS MADE FROM THE ACCOUNT. 7 FOR THE ABOVE PROPOSITION THE APPELLANT WOULD LIKE TO RELY ON THE FOLLOWING CASES: - CIT VS. SINGHAL INDUSTRIAL CORPORATION 303 ITR 225(ALLD.) CHETAN GUPTA VS. ACIT 98 DTT 209 (DEL.) (TRIB. NARESH KOHLI VS. CIT 277 ITR 496 (P&H) ADDL. CIT VS. GHAI LIME STONE CO. 144 ITR 140 (M. P.) ANANTHARAM VEERASINGHAIAH & CO. VS. CIT 123 ITR 457 (SC) WHEREIN THE HON'BLE S.C. HAS HELD THAT 'WHEN AN INTANGIBLE ADDITION IS MADE TO THE BOOK PROFITS DURING AN ASSESSMENT PROCEEDINGS, IT IS ON THE BASIS THAT THE AMOUNT REPRESENTED BY THAT ADDITION CONSTITUTES THE UNDISCLOSED INCOME OF THE ASSESSEE. THAT INCOME, ALTHOUGH COMMONLY DESCRIBED AS INTANGIBLE, IS AS MUCH A PART OF HIS REAL INCOME AS THAT DISCLOSED BY HIS ACCOUNT BOOKS. IT HAS THE SAME CONCRETE EXISTENCE. IT COULD BE AVAILABLE TO THE ASSESSEE AS THE BOOK PROFITS COULD BE. THE SECRET PROFITS OR UNDISCLOSED INCOME OF AN ASSESSEE EARNED IN AN EARLIER ASSESSMENT YEAR MAY CONSTITUTE A FUND, EVEN THROUGH CONCEALED, FROM WHICH THE ASSESSEE MAY DRAW SUBSEQUENTLY FOR MEETING EXPENDITURE OR INTRODUCING AMOUNTS IN HIS ACCOUNT BOOKS.' FURTHER THE ASSESSEE'S REGULAR INCOME AS DECLARED IN RETURN IS ALSO INCLUDED IN THIS BANK ACCOUNT WHILE THE SAME HAS ALSO BEEN SEPARATELY ADDED RESULTING IN DOUBLE ADDITION. 5 . WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. REGARDING THE FIRST LEGAL PROPOSITION OF LEARNED A.R. OF THE ASSESSEE THAT WHEN THE ASSESSEE IS NOT MAINTAINING ANY BOOKS OF ACCOUNT, NO ADDITION IS JUSTIFIED U/S 68 OF THE ACT. 8 IN THIS REGARD, WE WOULD LIKE TO O BSERVE THAT EVEN IF NO ADDITION IS JUSTIFIED U/S 68 OF THE ACT, ADDITION CAN BE MADE U/S 69 OF THE ACT IN RESPECT OF DEPOSIT IN BANK ACCOUNT IF THE ASSESSEE CANNOT SATISFACTORILY EXPLAIN THE SOURCE OF DEPOSIT. THIS IS BY NOW SETTLED POSITION OF LAW THAT M ERELY BECAUSE A WRONG SECTION HAS BEEN INVOKED BY THE ASSESSING OFFICER, THE ADDITION CANNOT BE DELETED AND SUCH ORDER IS NOT ILLEGAL AND AT THE BEST IT IS IRREGULAR WHICH CAN BE REGULARIZED BY SUBSTITUTING THE CORRECT SECTION IN PLACE OF WRONG SECTION. H ENCE, THESE CONTENTIONS OF LEARNED A.R. OF THE ASSESSEE REGARDING FIRST LEGAL PROPOSITION DOES NOT HELP THE ASSESSEE. 6. THE SECOND LEGAL PROPOSITION AS PER LEARNED A.R. OF THE ASSESSEE IS THAT FOR CREDITS IN BANK PASS BOOK OF M/S DIXIT & CO., NO ADDITION CAN BE MADE IN THE HANDS OF ASSESSEE BECAUSE M/S DIXIT & CO. IS A PARTNERSHIP FIRM BEING SEPARATE ENTITY. IN THIS REGARD, WE FIND THAT THE PRESENT APPEAL IS IN SECOND INNING AND EARLIER THE ISSUE WAS DECIDED BY THE TRIBUNAL IN I.T.A. NO.496 AND 623/LUC/0 2 DATED 28/09/2007 AND AS PER THIS TRIBUNAL ORDER, THE MATTER WAS RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER FOR FRESH DECISION IN THE LIGHT OF THE TRIBUNAL DECISION FOR ASSESSMENT YEAR 1996 - 98 IN I.T.A. NO.363/LUC/03 OF MARCH, 2005. THE RELEVANT PORTION OF THIS TRIBUNAL ORDER FOR ASSESSMENT YEAR 1997 - 98 WAS REPRODUCED BY THE TRIBUNAL IN ITS ORDER FOR ASSESSMENT YEAR 1996 - 97. IN ASSESSMENT YEAR 97 - 98, IN THE TRIBUNAL ORDER, IT WAS STATED THAT LEARNED A.R. OF THE ASSESSEE HAS GIVEN UNDERTAKING BEF ORE THE TRIBUNAL THAT THE ASSESSEE WILL BE EXTENDING FULL COOPERATION TO THE ASSESSING OFFICER IN SECOND INNING. IN PARA 6 OF THE TRIBUNAL ORDER FOR THE ASSESSMENT YEAR 96 - 97 ALSO, IT IS NOTED BY THE TRIBUNAL THAT THE ASSESSEE IS REQUIRED TO EXTEND FULL COOPERATION TO THE DEPARTMENT IN GETTING THE ASSESSMENT EXPEDITED AND IN CASE THE ASSESSEE DID NOT DO SO, THE ASSESSING OF FICER WILL BE FREE TO DRAW INFERENCE IN ACCORDANCE WITH LAW. IN THE LIGHT OF THIS TRIBUNAL ORDER, THE ASSESSING 9 OFFICER HAS NOTED IN THE IMPUGNED ORDER THAT SEVERAL NOTICES WERE ISSUED BY HIM TO THE ASSESSEE FOR COMPLIANCE ON 07/03/2008, 04/04/2008 AND 10 /10/2008 BUT NOBODY ATTENDED THE CASE. THEREAFTER, THE ASSESSING OFFICER ISSUED FURTHER NOTICE ON 05/11/2009 AND IN COMPLIANCE TO THIS NOTICE, SHRI RAJIV GUPTA APPEARED AND FILED REQUISITE DETAILS, WHICH ARE PLACED ON RECORD. THEREAFTER, THE ISSUE WAS DE CIDED BY THE ASSESSING OFFICER AFTER CONSIDERING THE REPLY OF THE ASSESSEE. REGARDING THE EXISTENCE OF PARTNERSHIP F I RM I.E. M/S DIXIT & CO., IT IS OBSERVED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER THAT AS PER THE PARTNERSHIP DEED DATED 18/09/1993 , IT HAS BEEN STATED THAT THE BUSINESS OF THE PARTNERSHIP FIRM IS SERVICE JOB OF ADVOCACY BUT IN REPLY DATED 23/03/200 1 FILED BEFORE THE ASSESSING OFFICER DURING ORIGINAL ASSESSMENT PROCEEDINGS, IT WAS STATED THAT THE BUSINESS OF THE FIRM WAS CONSTITUTED F OR CONSULTANCY ON OF ELECTRIC INSTALLATION OF COMPAN IES, B UT DUE TO ABSENCE OF BUSINESS AND SHORTAGE OF FUNDS, THE FIRM HAS REMAINED IN LOSS THROUGHOUT. THE ASSESSING OFFICER HAS ALSO NOTED THAT IT WAS ALSO STATED BY THE ASSESSEE IN THIS LETTER THAT SHRI VISHAL DIXIT IS A PARTNER IN HUF CAPACITY AND BOTH THE PARTNERS OPERATED THE BANK ACCOUNT AND THE BANK ACCOUNT IS NOT RELATED TO SHRI VISHAL DIXIT IN ANY MANNER IN INDIVIDUAL CAPACITY. THE ASSESSING OFFICER ALSO NOTED THAT VIDE FURTHER REPLY DATED 0 3 /12/ 2008, THE ASSESSEE HAS STATED THAT IN THE YEAR 1993 - 94 , THE ASSESSEE FORMED A PARTNERSHIP FIRM IN THE NAME OF M/S DIXIT & CO. AND STARTED BUSINESS OF CAR SALE PURCHASE AND SINCE BEGINNING, THE FIRM INCURRED LOSSES, AS SUCH NO INCOME TAX RETURN WAS FILED. IT WAS ALSO SUBMITTED THAT THE ASSESSEE FILED INCOME TAX RETURN IN HIS INDIVIDUAL CAPACITY AND AS THERE WAS NO INCOME FROM THE FIRM, THE MATTER WAS NOT MENTIONED IN THE ITR. THE ASSESSING OFFICER ALSO NOTED THAT ANOTHER PARTNERSHIP DEED DATED 11/09/97 WA S ALSO SUBMITTED DURING THE ASSESSMENT PROCEEDINGS AFTER TRIBUNAL ORDER IN FIRST ROUND AND THIS DEED IS 10 BETWEEN SHRI VISHAL DIXIT & KM. MONIKA SINGH TO CARRY ON BUSINESS OF SERVICE JOB OF LEGAL FIRM ALONG WITH INSTALLATION OF ELECTRIC SUBSTATIONS. HE HAS ALSO NOTED THAT THIS DEED DOES NOT MENTION ANY REFERENCE OF THE DEED OF PARTNERSHIP DATED 18/09/1993. THEREAFTER, THE ASSESSING OFFICER HAS GIVEN A FINDING THAT IT IS APPARENT THAT THERE ARE CONTRADICTION BETWEEN THE CONTENTS OF THE PARTNERSHIP DEED AND T HE REPLIES FILED BY THE ASSESSEE ON DIFFERENT DATES. THE IMPUGNED ORDER OF CIT(A) IS ALSO ON THE BASIS THAT THERE IS NO CREDIBLE EVIDENCE TO SUPPORT THE CONTENTION THAT THE TRANSACTIONS WERE ACTUALLY CONDUCTED BY THE SAID FIRM. HE HAS ALSO NOTED THAT THE DOCUMENTS ENCLOSED IN SUPPORT OF THE TRANSACTIONS OF THE FIRM HAVE TO BE CONSIDERED ONLY AS EVIDENCE CREATED , AFTER THE DECISION BY TRIBUNAL , TO GIVE VALIDITY TO THE ALLEGED TRANSACTIONS CONDUCTED BY THE CONCERN. 7. FROM THE ABOVE, IT IS SEEN THAT THE MAIN OBJECTION IS OF THE A.O. T HAT THERE IS SOME INCONSISTENCIES IN OBJECTS OF THE FIRM AS PER DEED AND REPLIES. SECOND OBJECTION IS OF LEARNED CIT (A) THAT THERE IS NO CREDIBLE EVIDENCE TO SUPPORT THE CONTENTION THAT THE TRANSACTIONS WERE ACTUALLY CONDUCTED BY THE SAID FIRM. REGARDING THESE OBJECTIONS, WE ARE OF THE CONSIDERED OPINION THAT MERELY ON THE BASIS OF THESE OBJECTIONS, IT CANNOT BE CONCLUDED T HAT THE FIRM IS NOT IN EXISTENCE. AS PER SECTION 184 OF I.T. ACT, A FIRM SHALL BE ASSESSED AS FIRM IF THE PARTNERSHIP IS EVIDENCED BY AN INSTRUMENT AND THE INDIVIDUAL SHARES OF THE PARTNERS ARE SPECIFIED IN THE INSTRUMENT. THIS IS NOT THE CASE OF ANY OF TH E AUTHORITIES BELOW THAT THE FIRM IS NOT EVIDENCED BY AN INSTRUMENT I.E. PARTNERSHIP DEED AND THE INDIVIDUAL SHARES OF THE PARTNERS ARE NOT SPECIFIED IN THE SAID PARTNERSHIP DEED. AS PER THIS SECTION AND SECTION 185, CERTAIN OTHER CONDITIONS ARE TO BE SATI SFIED AND THEN ONLY THE FIRM CAN BE ASSESSED AS A FIRM AND IF THOSE CONDITIONS ARE NOT SATISFIED THAT IT HAS TO ASSESSED IN THE MANNER PRESCRIBED IN SECTION 185. HERE, IN 11 THESE APPEALS, WE ARE NOT CONCERNED WITH THE ASSESSMENT OF THE FIRM AS FIRM AS SUCH O R U/S 185. HERE, WE ARE CONCERNED WITH THIS CLAIM OF THE ASSESSSEE THAT ANY DEPOSIT IN THE BANK ACCOUNT IN THE NAME OF M/S DIXIT & CO. CANNOT BE ADDED IN THE HANDS OF THE ASSESSEE AND IT CAN BE EXAMINED ONLY IN THE HANDS OF THE FIRM M/S DIXIT & CO. AS PER ABOVE DISCUSSION, WE FIND FORCE IN THIS CLAIM OF THE ASSESSEE AND HENCE, WE HOLD THAT FOR DEPOSITS IN THE BANK ACCOUNT IN THE NAME OF M/S DIXIT & CO., NO ADDITION CAN BE MADE IN THE HANDS OF THIS INDIVIDUAL. 8. THE THIRD LEGAL PROPOSITION IS THAT THE DEPA RTMENT HAS NOT GIVEN ANY BENEFIT TO THE ASSESSEE OF PEAK CREDIT THEORY OR TELESCOPING. IN THIS REGARD, WE FEEL THAT IF THE ASSESSEE CAN ESTABLISH THAT ANY DEPOSIT IN THE INDIVIDUAL BANK ACCOUNT OF THIS ASSESSEE OR ANY EXPENSES OR INVESTMENT BY THIS INDIVI DUAL ASSESSEE IS OUT OF WITHDRAWAL FROM THE BANK ACCOUNT OF THE FIRM M/S DIXIT & CO., THEN THE ASSESSEE DESERVES TO GET TELESCOPING TO THAT EXTENT BECAUSE SOURCE IN THE HANDS OF THIS INDIVIDUAL ASSESSEE GETS EXPLAINED AND IF THE FIRM IS NOT ABLE TO EXPLAIN THEN ACTION MAY BE TAKEN IN THE HANDS OF THE FIRM AS PER LAW BUT NO ADDITION CAN BE MADE IN THE HANDS OF THIS INDIVIDUAL WHERE THE ASSESSEE DESERVES TELESCOPING AS DISCUSSED. 9. REGARDING THE MERIT OF VARIOUS ADDITIONS IN VARIOUS YEARS, WE FEEL THAT IN VIEW OF OUR DECISION IN RESPECT OF LEGAL CONTENTIONS NO. 2 AND 3, THE ENTIRE MATTER SHOULD GO BACK TO THE FILE OF THE A.O. FOR A FRESH DECISION IN THE LIGHT OF THIS DECISION. HENCE, WE SET ASIDE THE ORDER S OF LEARNED CIT (A) IN ALL THESE YEARS AND RESTORE THE ENTIRE MATTER BACK TO THE FILE OF THE A.O. FOR A FRESH DECISION. THE ASSESSING OFFICER SHOULD NOT MAKE ANY ADDITION IN THIS CASE IN ANY YEAR IN RESPECT OF DEPOSITS IN BANK ACCOUNT IN THE NAME OF M/S D IXIT & CO. OR FOR ANY RECEIPT OR INVESTMENT ETC. IN THE NAME THAT FIRM. 12 SECONDLY, FOR THE DEPOSITS IN INDIVIDUAL BANK ACCOUNTS IN THE NAME OF THIS INDIVIDUAL ASSESSEE AND OTHER ADDITIONS IN RESPECT OF VARIOUS EXPENSES AND INVESTMENT BY THIS INDIVIDUAL ASSE SSEE, THE ASSESSEE SHOULD FURNISH HIS CLAIM FOR TELESCOPING AND THE A.O. SHOULD EXAMINE THE SAME AFTER PROVIDING ADEQUATE OPPORTUNITY TO THE ASSESSEE AND IF THE ASSESSEE CAN ESTABLISH THE FACT TH A T ANY SUCH DEPOSIT, EXPENSES OR INVESTMENT IS OUT OF WITHDRAW AL FROM THE BANK ACCOUNT OF THAT FIRM THAN NO ADDITION SHOULD BE MADE IN THE HANDS OF THIS INDIVIDUAL ASSESSEE IN RESPECT OF SUCH ITEMS ALTHOUGH THE A.O. IS AT LIBERTY TO EXAMINE THE SOURCE IN THE HANDS OF THE FIRM AS PER LAW. 10. IN VIEW OF OUR DECISION IN ABOVE PARA, NO SEPARATE ADJUDICATION IS CALLED FOR IN RESPECT OF VARIOUS GROUNDS ON MERIT. 11 . IN THE RESULT, THE APPEAL S OF THE ASSESSEE STAND ALLOWED FOR STATISTICAL PURPOSES . (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 1 / 1 1 /2014. *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR