TaxTMI 
TaxTMI 
1998 (1) TMI 98
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....e by the assessee-firm. Finding is incorrect. 3. The learned CIT(A) has erred in law and facts in holding that cases decided by Tribunal, Amritsar Bench, Amritsar, quoted and referred by assessee during hearing did not have the similarities with the facts of assessee's case. 4. The learned CIT(A) has erred in law and facts by not taking into consideration the factum of non-compliance of directions under s. 144A." 2. The AO has observed that part of Arhat received by the appellant was credited in the books of account of Gulab Singh & Co., Gulab Singh & Co. is a trust floated by Joginder Singh S/o Gobind Singh of Ludhiana on 10th Aug., 1982 which has been settled with corpus of Rs. 5000 and Pritam Singh was appointed trustee, for the be....
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....986, at Jalandhar, on his request. Further application was received from Mr. Mangal wherein he stated that the case may be adjourned after 25th Jan., 1986 due to disturbed conditions prevailing in the State. The case was accordingly fixed on 25th Feb., 1986 when Mangal appeared again and filed copy of account of Sewa Singh & Co. in the books of Gulab Singh & Co., Kotkapura. Its perusal showed that there are number of adjustment entries with Sewa Singh & Co. Kotkapura. The assessee also filed the aforesaid copy of account with you. In order to verify the nature of these adjustment entries, he was asked to file detailed of such adjustment entries in the books of Gulab Singh & Co. and of Zamidars in the books of Gulab Company and Sewa Singh & ....
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....ner in Sewa Singh & Co. with 25 per cent share. No doubt, the agriculturists are at liberty to sell their produce to whichever concern they think fit, but it is seen that payment on account of produce sold through Gulab & Co. was made invariably by Sewa Singh & Co. as and when it received the payments from the market. Thus, business to the tune of Rs. 17,88,677 was carried out through Sewa Singh & Co. The accounts of Gulab Singh & Co. have also been written by Bahadur Singh who is a paid employee of Sewa Singh & Co. (c) The interlacing and inter-locking of funds is very clear from the examination of the copy of account of Sewa Singh & Co. as appearing in the books of Gulab Singh & Co. The copy of account pertains to the period 6th Sept., ....
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....er-locking of funds between the two concerns is based on solid reasons. In view of the foregoing discussion, addition of Rs. 44,173 is upheld." 4. The learned counsel of the appellant pleaded that the direction under s. 144A were not carried out by the AO. He filed a copy of the direction alongwith the written submission made by the appellant before the IAC. The learned counsel of the appellant submitted that Gulab & Co. is not discretionary trust which came into existence on 10th Aug., 1992 and, therefore, both are different and independent. He has further submitted that no expenses of any type are overlapping and both units are independent units. The learned counsel has also filed copy of assessment order of Asa Singh Maninder Singh....
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....directed the AO to look into the copy of accounts and decide the issue accordingly. The CIT(A) has also adjudicated upon the nature of entries and discussed in his decision on the issue. We have perused the copy of account of the appellant and copy of account of Gulab & Co. It is abundantly clear that the main income of Gulab & Co. is from Dami i.e., commission. In the interest income, there is loss of very petty amount of Rs. 3857. If one will examine the statement of Gulab & Co. filed at pp. 41 and 43 of the paper-book, it is clear that the payments are adjustments with Sewa Singh & Co. The commission business requires investment of funds whereby the goods on commission are sold on credit and the payments are made to the parties on whose ....