TaxTMI 
TaxTMI 
1986 (7) TMI 128
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....red in law and on facts in holding that the business of M/s Uma Paints belongs to the partnership firm and not to Shri Kalidas M. Patel and as such, the income should not be clubbed with the income of Shri Kalidas M. Patel. 2. The ld. AAC instead of allowing appeal, should have set aside the assessment for fresh examination since according to him there was insufficient evidence on record to hold the business as a benami concern." The assessee is an unregistered firm. The ITO by his orders made in case of this assessment held that the business carried on by the assessee partnership was a benami business of Kalidas M. Patel. He therefore included the entire income belonging to the firm for the respective years under the appeal in the ha....
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....tiff paints, and excisable commodity without bills by keeping the clearance from the factory below Rs. 2 lakhs. The sales above Rs. 2 lakhs were liability to excise duty. At the premises of Hammer paints at 2, Shirish Industrial Estate, Rakhial, Ahmedabad the books of Uma Paints, the assessee were found. The Asst. Director of Intelligence, Ahmedabad recorded the statement of Kalidas. M. Patel and his wife Smt. Hiraben. Smt. Hiraben was a partner of the assessee firm showed complete ignorance about the business of the assessee firm. It was claimed by Shri K.M. Patel that the business in the name of Uma Paints was started in 1972 with the said three partners. An employee of K.M. Patel was also examined by the Central Excise Authorities. Simil....
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.... of Shri Kalidas M. Patel who is separately assessed. But when a return of income is filed in name of M/s Uma Paints showing the income from its business, an assessment is made here under on protective basis. He thus determined the income in the hands of the assessee for the respective years and included the same in the hands of K.M. Patel as stated above. 4. Being aggrieved the assessee carried the matter in appeal before the AAC. It was strongly contended that there was no justification to include the income of Uma Paints in the hands of K.M. Patel because the income earned by Uma Paints was so earned by a partnership firm only constituted under a deed of partnership. It was next pointed out that apart from Hiraben, the wife of Shri....
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....He therefore, held that the income was assessable in the hands of the assessee on substantive basis and was required to be deleted in the hands of K.M. Patel. 5. Being aggrieved the Revenue has come up in appeal before us. The ld departmental representative relying on the order of the ITO reiterated that the ITO's order was required to be restored in any case if there was insufficient evidence as held by the AAC the matter may be restored by the ITO to collect proper evidence in order to enable him to sustain the addition in the hand of K.M. Patel. The ld departmental representative however added that Hiraban was wife of K.M. Patel who admittedly had no knowledge of the business. Therefore, she was nothing but benamidar of K.M. Patel. Se....
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....rtners. The raid was a subsequent event and the statement obtained then had no relevance so for as the year under appeals were concerned. 6. I have considered the rival submissions. I must say at the outset that the ground raised by the Revenue for remitting the matter for gathering fresh evidence cannot be accepted as the Revenues case for holding the assessee firm as benami of K.M. Patel must stand or fall on the basis of the evidence on which the ITO has relied upon. The burden was heavily on the department to establish the case on benami business. No worth while evidence was placed before me on behalf of the Revenue on basis of which there could be any justification for restoring the matter to the ITO as claimed by the department in ....