1984 (4) TMI 73

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....venience. 2. We will first take I.T.A. No. 1434(Alld)/1982, the appeal against the quantum of the assessment. The assessee filed a return in the status of a firm. It is the first year of the assessment as, according to the assessee, the business was started on 1st June, 1977. The ITO issued a notice under s. 143(3) of IT Act, 1961, which was duly complied with. It appears that he also asked the....

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....he Act and, in any case, the disallowance of Rs. 43,000 was uncalled for. 4. After hearing the parties, we are of the opinion that the matter must go back to the ITO. It appears that there are several contradictory statements in the assessment order. While against col. "Section and sub-section under which the assessment is made", s. 144 of the Act has been mentioned, but at the end of the asses....

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....s. 40A(3) of the Act, as also removing the contradictions in the assessment. 5. The ITO also noticed credits of Rs. 7,000 and Rs. 3,000 in the names of partner, Smt. Kunti Devi and Shri Suresh Chandra Gupta respectively. These credits were found on the first day of the accounting year i.e., on the day the business had been started in the status of the firm. Smt. Kunti Devi in her affidavit, sta....

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.... the credits in the accounts of the two partners on the very first day of the business, which were introduced by them as their capital. The assessee could hardly be expected to earn income before it had commenced its business. Although in principle, the assessee was required to explain the source of the amounts, but as a fact it appears that it has discharged its burden in terms of s. 68 of the Ac....