1995 (12) TMI 55

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....ion of the High Court under section 256(2) of the Income-tax Act, 1961, the Income-tax Appellate Tribunal has referred the following question for the opinion of this court : " Whether the Tribunal was correct in law in invoking section 68/69 of the Income-tax Act, 1961, and treating a sum of Rs. 1,43,000 as income from undisclosed source of the petitioner-firm when the petitioner-firm had not y....

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....ce was, therefore, drawn that the deposits aggregating to Rs. 1,43,000 represented the income of the assessee-firm from undisclosed sources and that was, therefore, added in the assessee's hands. The dispute was carried in appeal to the Commissioner of Income-tax (Appeals) (for short, " the C. I. T. (Appeals) "). He held that since the deposits were made in the assessee-firm by the partners bef....

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.... to Rs. 1,43,000 represented the capital contribution of the partners in the firm and they were made before the firm started its business. It was for the partners to explain the source of the deposits and if they failed to discharge the onus, then such deposits could be added in the hands of the partners only. The Tribunal erroneously came to the conclusion that the deposits represented the undisc....

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....ncome of the partnership-firm. These facts are materially different from the fact of the instant case. Most striking feature of the case on hand is that all the deposits came to be made during the accounting year in the books of the assessee-firm before it started its business. Therefore, the onus was on the partners to explain the source in the case on hand and if they failed, the amount could ha....