TaxTMI 
TaxTMI 
2016 (9) TMI 1069
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....ms of the partnership deed of the firm M/s. Moti Mahal Restaurant. 3. Whether learned CIT(A) is correct in not appreciating that the Bank account in the assessee's individual name was not the Bank account of the firm M/s. Moti Mahal Restaurant, in which the assesse was a partner. 4. The appellant craves leave for reserving the right to amend, modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal. 2. The cross objection raised by the assessee are as under: 1. Whether the learned CIT(A) was justified in holding that the objections raised and filed by the appellant during the course of assessment against the issuance of notice u/s 148 of the Income Tax Act, 1961 by the assessing officer ward 30(1) were dealt with and settled vide order sheet entry dated 26/11/2012 after which the appellant participated in the assessment proceedings uninterruptedly without raising any objections in spite of the fact that the assessing officer clearly stated in his assessment order that the assessee has not filed any objection against the reasons recorded by him on the basis of which notice u/s 148 was issued. 2. Whether the assessing o....
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....of Rs. 63,47,405/- on merit. Aggrieved, the Revenue and the assessee both are in appeal and cross objections respectively raising grounds as reproduced above. 4. Before us, the ld. Senior Departmental Representative, relying on the order of the Assessing Officer, submitted that the assessee failed to explain cash deposits in the bank account with the help of receipts appearing in the partnership firm, namely, M/s. Moti Mahal Restaurant and, therefore, the addition made by AO was justified. 5. On the other hand, the ld. Authorized Representative of the assessee submitted that for the purpose of depositing the daily sale proceeds of the partnership firm M/s Moti Mahal Restaurant, the assessee opened a saving account no. 08240100014118 in the Bank of Baroda, Daryaganj New Delhi, in which a sum of Rs. 63,47,405/- was found deposited by the Assessing Officer. Subsequently, balance from another account No. 8240100001772, which was in the joint name of the assessee and another partner of the firm, Smt. Kushal Deep was also deposited in the saving account in the name of the assessee. He further submitted that the assessee and the firm continued to treat the said saving accounts as the ba....
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....mutuality. In other words, the partners have implied authorities to transact the business of the partnership firm in a bonafide manner and if any partner fails to conform to the standards laid down in the partnership deed, he becomes liable for action at the hands of the other partners. In the instant case, however, the appellant seemingly opened the savings bank account no. 08240100014118 without the consent of the other partners, but his and the other partners' subsequent conduct i.e. raising no voice against the action of the appellant. Sh Vinod Chadha, in opening a SB account in his own name to be operated singly by him for depositing the firm's receipts etc. only go to reinforce the belief that the appellant's aforesaid conduct had their approval. Reticence is tacit approval, is the legal maxim. In the instant case, the returns of income of the firm M/s Moti Mahal Restaurant reflecting the SB account of the appellant Sh Vinod Chadha also went to prove that the other partners did not consider such an action of the appellant to be in violation of "Clause-12" otherwise they could have brought a suit against him. In this context Section 15 of the Indian Partnership Act als....
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....ss transactions of his firm M/s Moti Mahal Restaurant as the property of the firm neutralized the rigours of Section 15 of the Indian Partnership Act, 1932 and went to prove that the unity of ownership of the property i.e. bank accounts of the appellant individual namely account Nos. 0824010001772 & 08240100014118 were not taken away from the other partners in as much as the said bank accounts were revealed in the income tax return of the partnership firm for the relevant AY to which the deposits amounting to Rs. 63,47,405/- related. In other words none of the partners were deprived of the benefits of the sales transactions of the partnership firm M/s Moti Mahal Restaurant in breach of the contract of partnership. Even otherwise, the trail of money lying deposited in the saving bank accounts of the appellant and not the dictates of the clause-12 of the partnership deed was significant from the point of view of the taxability of the deposits amounting to Rs. 63,47,405/-. The Ld. AO was misconceived and misdirected in harping on something which was of little consequence as far as the question of bringing to tax the sum of Rs. 63,47,405/- lying in the SB accounts was concerned. Hav....
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....he writ petitions on the question of interpreting the effect of the two letters. He said that it was not correct for the High Court to leave the decision to the ITO and that there was failure on the part of the High Court to exercise its jurisdiction which it manifestly did possess. Mr. Salve also referred to a few decisions of this Court as to when the ITO can assume jurisdiction under s. 147 of the Act. We, however, think that it is not necessary for us to refer to any of those decisions as law is well settled on the subject starting from Calcutta Discount Co. Ltd. vs. ITO & Anr. (1961) 41 ITR 191 (SC) : TC 51R.779. In the present case what we find is that though proceeding for each assessment initiated by the ITO was under s. 147(a) of the Act but the High Court considered the same to be one under s. 147(b) of the Act without further examining the question if notices under s. 148 of the Act on that ground will be within the period of limitation. Again, we do not think that we need to delve into this field as we find the High Court erred in not exercising its jurisdiction when the facts were all there and law clear on the subject. Having examined the matter threadbare after enter....