TaxTMI 
TaxTMI 
1981 (1) TMI 18
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....business consisting of cotton oil extraction and the said business was commenced with effect from January 8, 1967. Admittedly, there is no partnership document but a registration certificate under the Sales Tax Act has been obtained in the name of the alleged firm. No doubt, later on, a partnership deed has been executed on December 25, 1968, which is, however, not material for the purposes of the assessment for the assessment year 1969-70, the accounting year of the assessee being from Diwali to Diwali. In the instant case, the accounting year ended in October, 1968. The assessment of the HUF was completed on February 6, 1970. However, the ITO came to know about the business in cotton and oil extraction which was carried on in the name and....
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....ess, a notice to show cause why penalty should not be levied for concealment of income was issued and as the minimum penalty leviable under the. Act exceeded Rs. 1,000, the ITO referred the matter to the IAC. The IAC in the penalty proceedings took the view that the assessee had failed to disclose the income which: properly belonged to the HUF because the HUF had advanced fund s to the firm from its own cash and: consequently he levied a 'penalty ' of Rs. 28,825, holding that the Explanation to s. 271(1)(c) was attracted. Against the order of penalty separate appeal Was preferred and both the appeals were disposed of by the Tribunal by a common order." With regard to the merits of the contention that the income which was being brought to ta....
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....e has, with, reference to: the first question, argued that the conclusion drawn by the authorities that the income from oil extraction and cotton business belonged to the HUF is mainly based on the finding that it was the HUF which had financed the business. The learned counsel wanted to contend that it was not necessary that the partners who wanted to form a partnership must necessarily reduce the, terms of the partnership to writing and that it was permissible for the two coparceners, Purushottam and Shridhar, to do separate business by forming a partnership independent of the HUF. A reading of the order of the Tribunal would show that the Tribunal has found as a fact that the partnership was not a genuine partnership firm at all. That fi....
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....and cotton could be included only in the hands, of the HUF. Coming to the second question which turns, on the legality of the order of penalty, the learned councel has vehemently contended that on facts there was no concealment of income at all. The argument is that the returns of the two brothers which was submitted to the same, ITO clearly included the income which they claimed to have derived from their share of the income of the alleged partnership. Thus, according to the learned counsel, it was fully disclosed by the two brothers as to what they had earned by way of income from the new business of cotton and oil extraction. Thus, according to the learned counsel, there was no question of any concealment. In our view, this contention....