TaxTMI 
TaxTMI 
2007 (7) TMI 204
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..... 11596/2006. K. Chinnathamban, the respondent-assessee, was connected with the firm by the name V.V. Enterprises, having its premises at Nos. 2 and 3A, East Perumanoor Road, Salem. There was a search in the premises by police officers on August 19, 1991, when Rs. 1.18 crores (approx.) was seized. This seizure was followed by a survey under section 133A and investigations under section 132 of the Income-tax Act, 1961 (hereinafter referred to as the "said Act"). The firm was managed by one K. Palanisamy who had filed his return and who appeared on summons and gave statements. In the course of assessment proceedings, it was detected that the books of accounts were incomplete. K. Palanisamy was not in a position to explain the source of the d....
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....claimed that part of this amount belonged to the members of the public. This part of the statement was not accepted by the Department. In view of the aforestated position the Assessing Officer proceeded to frame the assessment in the hands of Palanisamy on protective basis and in the hands of deposit holders for unexplained deposits. The most important aspect of the case is that although M/s. V.V. Enterprises was stated to be a registered firm, there were no bank accounts in the name of such a firm. There were no accounts in the name of any of the partners of the alleged firm. There were no deposits in the name of the alleged firm. There were no deposits in the name of any of the partners of the alleged firm. None of the asses sees have bee....
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....ppeals). In the present case, the Tribunal has further held that the partners were employees of public sector undertakings; that they had acted as partners; that the firm was floated and, therefore, though the firm was illegally constituted, however, the very existence of the firm was never in doubt. The Tribunal held that the members of the public have placed their deposits with the said firm through the relatives and friends. The Tribunal has further held that though the aforestated amount ought to have been deposited in the name of the firm, it was not so done and, therefore, it was necessary to link up the said amounts with the books of the firm and to the extent possible should be shown as amounts received by the said firm as deposits....