TaxTMI 
TaxTMI 
2015 (2) TMI 676
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....d to as 'the Act') defines a firm as having the same meaning as assigned under the Indian Partnership Act, 1932. The revenue was required in the discharge of its onus, to prove the existence of a partnership of which Baldev Singh was a partner. A perusal of the record reveals that the revenue has not been able to produce any partnership deed or document that proves that Baldev Singh was a partner of M/s Baldev Singh & Co.. The mere fact that Baldev Singh may have signed certain documents during auction proceedings, on behalf of the firm does not raise inference that Baldev Singh was a partner. Baldev Singh was an employee of Pritam Singh and signed documents on behalf of Pritam Singh. It was for this reason that Pritam Singh made a disclosure of income from the liquor business. The initial order passed by the CIT(A) referring to the modus of excise vend contractors, namely, putting forward fictitious persons was wrongly reversed by the Tribunal in the first round of litigation. The CIT(A) had held that it is well known in the liquor trade that licences are obtained in benami names and the real beneficiary remains behind the scenes. As there was no evidence of the role of Ba....
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....rcumstances of the case, ITAT was justified in reversing a well versed order of CIT (A) in original appeal and thereby holding Mr. Baldev Singh as pertner of the appellant firm by simply relying upon the statement of Mr. Pritam Singh who was the actual beneficiary and owner of the appellant firm without confronting any material or documents relied upon as found from search operations of said Mr. Pritam Singh which is against established principles of law as laid down by this Hon'ble Court in the case of CIT Patiala v. Radhey Sham Sita Ram 22 I.T Rep 667 (P&H) wherein it was held that an addition made on the basis of a statement of a person without allowing opportunity to cross examine cannot be confirmed? III). "Whether, on the facts and circumstances of the case, ITAT was justified in reversing a well versed order of CIT (A) in original appeal and thereby holding Mr. Baldev Singh as partner of the appellant firm without appreciating the provisions of law as per Section 184 and 185 of the Income Tax Act, 1961 and other evidences on record? &....
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.... to any substantial questions of law much less the questions framed by the appellant. Baldev Singh has not denied his signatures on documents pertaining to M/s Baldev Singh & Co. The partnership deed, was in possession of partners but as Baldev Singh has not produced the partnership deed, an adverse inference has to be drawn against him. The inference is fortified by documents received from the excise department bearing Baldev Singh's signatures, on behalf of M/s Baldev Singh & Co., thereby proving that Baldev Singh was a partner and not an employee has urged. The findings recorded in the impugned orders are pure questions of fact that do not give rise to any question of law. We have heard counsel for the parties, perused the impugned orders, as well as orders passed in earlier proceedings. The seminal point that would determine the fate of these appeals is whether there is any evidence on record that would prove or raise an inference that Baldev Singh was a partner of M/s Baldev Singh & Co.. The Assessing Officer has held that Baldev Singh was a partner of Baldev Singh & Co. The findings are pure findings of fact but as counsel for the appellant is vehement in his conten....
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....itioned, as neither party has produced the partnership deed. Baldev Singh did not file any further appeal. The Assessing Officer requisitioned the relevant record from the Excise and Taxation Department, Ambala and after perusing the record held that as all relevant documents pertaining to the auction and the allotment of liquor vends are signed by Baldev Singh, he is a partner of M/s Baldev Singh & Co. The appellant filed an appeal before the Commissioner of Income Tax(A), which was dismissed on 22.08.2012. The appellant, thereafter, filed an appeal before the Income Tax Appellate Tribunal, Chandigarh, which was dismissed on 14.01.2013. Baldev Singh does not deny his involvement in the aforesaid firm but asserts that he was a mere employee, who was receiving a salary but his name was used by Pritam Singh, at the time of bidding and allotment of liquor vends. A perusal of the facts reveals that after remand by the ITAT, the Assessing Officer requisitioned the record from the Excise and Taxation Department, Haryana. A thorough examination of the record revealed that documents relating to the auction and the allotment of liquor vends bear the name of Baldev Singh son of Kashmir....
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....ate, Sh. Baldev Singh as one of the successful bidder (duly signed by Sh. Baldev Singh), it has been certified that-I/we do hereby undertake to license fee of Rs. 10,25,000/- (in words) (Ten Lacs Twenty Five Thousand only) fixed for the Auction on 16.03.1984 for the C.L. Liquor Vend B.C. Bazar & R.A. BazarAmbala Cantt for the year 1984-85 in accordance with the announcement made at the time of auction. iii) Certificate regarding announcement relating to the auction:- Name of the vend (1) B.C.Bazar, Ambala Cantt (2) R.A.Bazar, Ambala Cantt. Certified that the announcement relating to the auction of Country Liquor vend for the year 1984-85 in Ambala District have been read over to us before thecommencement of auction today the 16th March, 1984. &nbs....
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....er recording that even counsel for the assessee has conceded that documents requisitioned from the Excise and Taxation Department bear the signatures of the appellant went on to hold that the assessee's plea that he had merely lent his name to obtain the license, cannot be accepted as the assessee himself acted as a contractor, signed all relevant papers before the Excise Department, took a contract and, therefore, has to be held liable as a partner. The ITAT, the CIT(A) and the Assessing Officer, in our considered opinion, have rightly placed reliance upon this unrebutted documents to record findings of fact that Baldev Singh was a partner of Baldev Singh & Co. A finding of fact can only be set aside if it is perverse or arbitrary, is contrary to law or has been recorded by ignoring relevant evidence. A perusal of the impugned orders and the material on record does not persuade us to hold that the findings that Baldev Singh is a partner are in any manner, perverse or arbitrary, contrary to record or in violation of any legal principle. We are conscious of the fact that in the liquor trade vends are taken on benami names but in the absence of any evidence that Baldev Singh w....