1999 (9) TMI 34

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....cts and in the circumstances of the case, the Tribunal was right in law in holding that income derived by Shree Trading Corporation could not be included in the individual assessment of the assessee ?" The assessee is an individual. There was a firm by name Shree Trading Corporation which was doing the business separately. It was held that the said firm is a benami firm and accordingly proceedings under section 147(a) were initiated. In the said firm the wife of the petitioner and the married daughter were partners. There were nine other partners who were friends and employees of Shri G. M. Dharia. In the assessment proceedings of Shree Trading Corporation, the Income-tax Officer found that the firm is not a genuine one and the entire inco....

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....uted Rs. 1,000 each and a total capital of the firm was Rs. 19,000. It was found that the circumstances undoubtedly show that Shree Trading Corporation was a bogus one. One partner, Sri G. K. Joshi, has signed the instrument not only for himself but also as representing another partner by name B. G. Shankeshwari. B. G. Shankeshwari said that he has not signed the paper. It was observed that it was necessary for the Revenue to have shown that G. M. Dharia had invested his funds to trade in the name of a bogus firm. The transactions of the firm were only with the concerns where G. M. Dharia had an interest. The goods were purchased at a low price and sold at a very high price. It was considered that these circumstances do not lead to an infer....

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....essee nor could the firm be considered as benami.The wife and daughters should not be treated simply as name-lenders. It is not a registered firm. To whom the income belongs has to be decided on the basis of some evidence. Since there was no material, it could not be considered that the said income belongs to the assessee nor could it be considered to be a benami concern of the assessee. In the order passed by the Tribunal, it was considered that the assessee had the knowledge of the order passed in the case of the firm of Shree Trading Corporation. The order passed under section 185 has not been challenged and has become final. In view of the finding as reproduced above, the inevitable conclusion which arises is that the firm, Shree Tradi....