Case Law Details
RELEVANT PARAGRAPHS
1. On account of difference of opinion between the learned Members of Income-tax Appellate Tribunal, Cochin Bench, the following question has been referred to me:
“Whether, in the facts and circumstances of the case, the CIT(Appeals) is justified in holding that no addition can be made in the hands of the assessee towards undisclosed income from the liquor business carried on by the firms M/s. Malabar Associates. ?”
2. In my view the answer to the question is self-evident as it is a question of addition of undisclosed income from business admittedly “carried on by the firm M/s. Malabar Associates”. If the business is carried on by the firm, then whether it is disclosed income or undisclosed income, is to be assessed in the hands of the firm and not in the hands of the partners. In spite of the above short answer, I proceed to consider the facts and circumstances of the case as emerging from the dissenting orders of the two learned Members.
3. The premises of the assessee were searched u/s.132 of the Income-tax Act, 1961, but no incriminating documents were found. The Revenue also carried search at the premises of one Shri K.K. Sasi, who was the Accountant of several partnership firms in the block period, in which the assessee was a partner. Accordingly, assessee was asked to file a return u/s.l58BC for the block period. A ‘Nil’ return was filed. In the statement recorded u/s. 132(4) on 29-07-1999 and also in response to notice issued to the assessee during the course of assessment proceedings, assessee admitted that he was a partner in 22 concerns as under:
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