These are appeals preferred by the Revenue against the orders of the CIT(A)/AAC for the asst. yrs. 1979-80, 1980-81 and 1981-82. As the issue involved is common these appeals have been heard together and disposed of by this consolidated order.
2. The grievance of the Revenue for asst. yr. 1979-80 is that the learned CIT(A) erred in holding that the assessee-firm M/s. Shri Gopal Mills is genuine and further erred in directing the Assessing Officer to grant registration to the firm. The grievance for asst. yrs. 1980-81 and 1981-82 is against allowing continuation of registration to the firm.
3. The facts in brief are that the firm M/s. Bansilal & Co., was constituted during the accounting year relevant to the asst. yr.
1975-76 by Shri Bansilal Athumal and Chandumal Safermal among others.
The firm was doing business in food grains as well as manufacturing of moong and tuvar pulses. As the profit of the firm was steadily rising the business relating to manufacturing of pulses was diverted to newly constituted firm Shri Gopal Pulse Mills (assessee) w.e.f. 10th Nov., 1977 which was constituted by the following : The Assessing Officer found that as per the terms of the partnership deed of the assessee-firm capital was invested and would continue to be invested by all partners with mutual understanding. But no interest would be charged thereon. The godown premises was provided by partner Shri Gopaldas and he would not charge any rent. Factory premises were taken on rent from Shri Tharumal and its tenancy rights would vest in the firm. The Assessing Officer observed that partner Shri Gopaldas gave godown premises for use of the firm as a consideration for sharing profits. Further though Shri Tharumal, husband of Smt. Jankiben was owner of the factory premises but the tenancy rights therein were given to the firm. The Assessing Officer came to the conclusion that the firm as constituted was not genuine for the following reasons : 1. Smt. Jankiben brought in capital of Rs. 85,041 on withdrawal from M/s. Bansilal & Co. Shri Tharumal husband of Smt. Jankiben was partner in the firm M/s. Bansilal & Co. from its very inception. He retired from the firm in the asst. yr. 1975-76 to make way for his wife Smt.
Jankiben to become partner from asst. yr. 1976-77. She brought capital of Rs. 15,000 in M/s. Bansilal & Co. as gifted by Shri Hotchand Billaram.
The Assessing Officer further found that the lady in her statement recorded during the course of search deposed that she never deposited any amount or capital with any firm and the ownership lies with her husband. He, therefore, held Smt. Jankiben as benamidar of her husband Shri Tharumal in the case of the assessee-firm also. The Assessing Officer also found that the factory premises belonging to her husband Shri Tharumal was earlier used by the firm M/s. Bansilal & Co. for manufacturing of pulses but the factory premises during the current year were given on nominal rent to the assessee-firm in which Smt.
Jankiben became partner. This fact also supported the view taken that she was benamidar of her husband.
4. Shri Gopaldas became full-fledged partner sharing profits and losses to the extent of 40% in the firm. The Assessing Officer found that as per his school certificate his date of birth was 1st Jan., 1962 and as such he completed only 15 years and 10 months on the date of joining the firm. He being a minor could not become full-fledged partner. The firm was, therefore, not validly constituted. When confronted it was claimed by the assessee that correct date of birth of Shri Gopal is 12th Jan., 1959 as recorded in Chathi Vahi in which birth date of all the members of the family are recorded. Further in the life insurance policy taken by Shri Gopal the date of birth was recorded as 12th Jan., 1959. The birth date of 1st Jan., 1962 mentioned in school certificate might be due to admission problem. The Assessing Officer recorded statements of Shri Gopal and his father Shri Bansilal about the birth date. The assessee also failed to produce the birth certificate from the records of the municipality or panchayat. The Assessing Officer found some inconsistency in the statement recorded and not satisfied with the evidence given. He held that the assessee-firm is not validly constituted in law Shri Gopaldas being minor having joined the firm as full pledged partner sharing profits and losses.
5. The Assessing Officer also found that Shri Gopal brought in capital on becoming partner in the firm M/s. Bansilal & Co. earlier totaling to Rs. 32,158 - Rs. 5,000 gifted by his father Shri Bansilal in S.Y. 2026, Rs. 20,000 gifted by Shri Jethanand in S.Y. 2030 who was found to be benamidar of Shri Bansilal and Rs. 7,158 being accumulated interest from S.Y. 2026 to 2033. The Assessing Officer therefore, held the view that as his capital came directly or indirectly from his father Shri Bansilal Shri Gopaldas was held to be a benamidar of his father Shri Bansilal in the firm M/s. Bansilal & Co. and on having brought his capital from Bansilal & Co. in the assessee-firm he was considered as a consequence benamidar of his father Shri Bansilal. The Assessing Officer also found that the godown was purchased by Shri Bansilal in January, 1968 in the name of Shri Gopaldas for a consideration of Rs. 10,000 and further expenditure thereon was incurred of Rs. 10,000 for addition. Shri Gopaldas, therefore, held the said premises as benamidar of his father and in S.Y. 2034 his father gifted the said premises to Shri Gopaldas.
6. The Assessing Officer thus held the view that Smt. Jankiben was benamidar of her husband Shri Tharumal, Shri Gopaldas was benamidar of his father Bansilal and Shri Gopaldas was also minor as per his school certificate at the time of becoming a partner in the assessee-firm. The firm was thus held to be non-genuine and invalid and accordingly registration claim was refused under S. 185(1)(b) for the asst. yr.
1979-80.
7. As a consequence continuation of registration claim for the asst.
yrs. 1980-81 and 1981-82 was also refused.
8. The assessee went in appeal before the first appellate authority against refusal of registration/continuation of registration for the asst. yrs. 1979-80 and 1980-81 and 1981-82. The first appellate authority found that Smt. Jankiben was earlier partner in the firm M/s.
Bansilal & Co. and there she was held as a benamidar of her husband Shri Tharumal for the asst. yr. 1978-79. The first appellate authority pointed out that in the appellate order dt. 20th Jan., 1983 for the asst. yr. 1978-79 in the case of M/s. Bansilal & Co. this issue has already been decided in favour of the assessee as the burden that Smt.
Jankiben is benamidar of her husband has not been discharged by the Department. As regards the allegation that her husband Shri Tharumal gave his factory premises to the assessee-firm at a nominal rent of Rs. 200 per month it was claimed that even if the rent is nominal no case has been made out by the Assessing Officer that Smt. Jankiben was admitted as a partner because of the factory premises given to the firm by her husband. It was also pointed out that she brought in her capital of Rs. 85,041, moreover rent claimed was allowed in the order passed under S. 143(3). On these facts the first appellate authority held that Smt. Jankiben was not a benamidar of her husband.
9. As regards the charge that Shri Gopal was minor at the time of becoming partner in the firm the first appellate authority has observed that this issue came up for consideration before him while dealing with the appeal in the case of M/s. Bansilal & Co. for the asst. yr. 1978-79 and after considering all evidence on record he gave a finding that Shri Gopal was not a minor on joining in that firm on 10th Nov., 1977, and his real date of birth was held as 12th Jan., 1959. Adopting the same reasons the first appellate authority gave a finding that Shri Gopal was not a minor when he was taken as a partner in the assessee-firm. The first appellate authority has further observed that while deciding the appeal of Bansilal & Co. he did not have the benefit of decision of the Honble Supreme Court in the case of Brij Mohansingh vs. Priya Bret Naren Sinha & Ors. AIR 1965 SC 282 dt. 5th Feb., 1964.
In this decision the Supreme Court held the view that in actual life it often happens that persons give false age of the boy at the time of his admission to school so that later in life he would have an advantage when seeking public service for which a minimum age of eligibility is often prescribed. The Court of fact cannot ignore this fact while assessing the value of entry and it would be improper for the Court to base any conclusion on the basis of entry, when it is alleged that the entry was made upon false information supplied with the above motive.
In view of the aforesaid decision of the Supreme Court school certificate cannot be taken as final and conclusive proof of age and other evidence has to be looked into. In view of the facts given in the decision of the Supreme Court cited supra the first appellate authority held that Shri Gopal was not a minor when he was admitted as full fledged partner in the assessee-firm.
10. As regards the allegation that Shri Gopal was a benamidar of his father Shri Bansilal the first appellate authority has pointed out that this issue also came up for consideration in the case of Bansilal & Co.
for the asst. yr. 1978-79 and in his appellate order dt. 20th Jan., 1983 he had given a finding after consideration of all evidence on record that Shri Gopal could not be considered as a benamidar of his father Shri Bansilal. As regards the godown and factory premises it was claimed that the same were purchased by Shri Bansilal in January, 1968 and the same was gifted to Shri Gopal in S.Y. 2034. It was also pointed out there is no averment in the partnership deed that the use of godown is a consideration for admitting Shri Gopal as a partner in the firm.
On the other hand Shri Gopal was admitted as a partner as he invested capital of Rs. 70,299 and he also had share in losses. Further after the godown was gifted it no longer belonged to Shri Bansilal. The Assessing Officer has also not made out a case that profit earned by Shri Gopal was enjoyed by his father Shri Bansilal. He was also claimed to be an active partner in the assessee-firm. It was also made out that if the godown was gifted by Shri Bansilal it is used by the firm and it will not make Shri Gopal as benamidar of Shri Bansilal because the property belonged to Shri Gopal. On consideration of these facts the first appellate authority held that Shri Gopal was not the benamidar of his father Shri Bansilal. Having held so the first appellate authority directed the Assessing Officer to grant registration to the firm for asst. yr. 1979-80 consequently the learned AAC allowed continuation of registration to the firm for the asst. yrs. 1980-81 and 1981-82 vide his order dt. 8th April, 1983.
11. The Revenue is now in appeal before us against the registration allowed to the firm for the years under consideration.
12. The learned Departmental Representative relied upon the order of the Assessing Officer and made a strong plea that on the facts discussed by the Assessing Officer the firm constituted was neither genuine nor valid for the reason that Smt. Jankiben and Shri Gopaldas were benamidars of Shri Tharumal and Bansilal respectively and Shri Gopaldas was minor at the time of joining the firm as per school certificate. He, therefore, contended that order of the Assessing Officer deserves to be restored.
13. The learned counsel for the assessee on the other hand advanced arguments in support of the order of the first appellate authority and submitted that on the basis of facts and material evidence on record the first appellate authority was justified in treating the firm as genuine and valid and allowing registration for the years under consideration. In support he also relied upon certain decisions.
14. We have carefully considered the rival submissions made by the learned representatives of the Revenue as well as the assessee and gone through the orders of the lower authorities and material evidence on record. We find that the firm M/s. Bansilal & Co. was initially constituted during the accounting year relevant to asst. yr. 1969-70 by five partners and it had undergone change of constitution almost in each year thereafter upto the asst. yr. 1976-77. Shri Bansilal and his son Shri Tharumal were the main partners. Smt. Jankiben, wife of Shri Tharumal became partner in the firm during the accounting year relevant to asst. yr. 1976-77 with 26% share in profit and loss of the firm and she remained partner for the asst. yrs. 1976-77, 1977-78 and 1978-79.
Shri Gopal also became partner during the accounting year relevant to the asst. yr. 1978-79 with 28% share in profit and loss of the firm.
The firm was granted registration upto the asst. yr. 1977-78 which shows that Smt. Jankiben was accepted as a genuine partner of the firm M/s. Bansilal & Co. for the asst. yrs. 1976-77 and 1977-78 and she was also subjected to tax on her share income from the firm. In asst. yr.
1978-79 the Assessing Officer held the view that Smt. Jankiben is not genuine partner but a benamidar of her husband Shri Tharumal. Shri Gopal was also held to be benamidar of this father Shri Bansilal. He was also found to be minor at the time of joining the firm M/s.
Bansilal & Co. as per school certificate. This shows that M/s. Bansilal & Co. was also refused registration for the asst. yr. 1978-79 for almost the same reasons as are obtaining in the case of the assessee-firm for the current asst. yr. 1979-80.
15. On appeal filed in the case of the firm M/s. Bansilal & Co. for the asst. yr. 1978-79 the first appellate authority examined the question whether Smt. Jankiben was benamidar of her husband Shri Tharumal and on consideration of material facts he gave a finding that Smt. Jankiben was not benamidar of her husband Shri Tharumal but was a genuine partner. The relevant para from the order of the first appellate authority in this regard is extracted hereunder : "After giving my anxious consideration to the facts of the case, I am of the view that when a statement of almost an illiterate household lady is taken, it should be taken with utmost care and should be explained word by word to the deponent. The background of the person cannot be ignored when a statement is being recorded on oath. One cannot expect same knowledge of law and appreciation of the facts from a person who does not much of legal issues involved compared to a person who is well conversant what is being said by him/her. In this background, the ITO should not have merely relied on the statement made by her who does not know much of consequences of it and who has not been explained what is asked and what answers are said to be given. As already stated, she should have been explained each question in the language she understood. Under the circumstances and in view of the affidavit filed by Smt. Jankiben, I have to hold that there is no legal justification treating her as a benamidar of her husband Shri Tharumal.
One of the basic points which is to be seen is that whether the profits earned by Smt. Jankiben T. have been enjoyed by her husband Shri Tharumal or any other person. There is nothing on record to show that she is not owner of profits shown by her as a partner. There is no material on record that share of her profits were enjoyed by Shri Tharumal or any other person. It is difficult to hold from gift of Rs. 1,500 by Hotchand Lilaram to Smt. Jankiben that Smt. Jankiben is benamidar of Tharumal. There is no material on record to show that Shri Hotchand Lilaram is benamidar of Shri Tharumal. Thus, I hold that the burden that Smt. Jankiben T. is benamidar of Shri Tharumal Bansilal has not been discharged by the Department." 16. The first appellate authority then examined the question whether Shri Gopal was benami of his father Shri Bansilal in paras 12 and 13 of his order dt. 20th Jan., 1983 and he gave the finding that Shri Gopal was a genuine partner and not a benamidar of his father Shri Bansilal with the following observations : "The counsel for the assessee stated that after filing this affidavit, Shri Gopaldas B. was examined on 3rd March, 1981 by the ITO who has made the assessment on 28th March, 1981. In this statement, the ITO has not asked or challenged any of the averments made in the affidavit of Shri Gopaldas B. wherein he has stated that he was partner in the firm of M/s. Bansilal & Co. from 16th March, 1977 to 11th Nov., 1977.
Counsel specially brought to my notice that the answer to question No.7 given by Shri Gopaldas B. on 3rd March, 1981 before the ITO in response to the question asked to him, Shri Gopaldas B. has stated in his affidavit that he has mentioned in his affidavits three averments, (1) age, (2) gift and (3) share in partnership. The counsel argued that since the ITO has not cross examined Shri Gopaldas B. in respect of his statement in the affidavit in which he has claimed to be a partner this part of the affidavit goes unchallenged. He has brought to my notice that decision in the case of State of Karnataka v. Mari Gwada AIR 1982 SC 1171 in which the Supreme Court had to deal with the similar issue and the Court held that the evidence unless challenged in cross examination has to be accepted and conclusion cannot be against the said evidence. The counsel stated that though this case was under the IT Act the principle of law laid by the Supreme Court will apply to the case of the assessee. The counsel also stated that in the affidavit, Shri Gopaldas has made a specific allegation that the statement was neither read to him nor explained to him and he was asked to sign the said statement without reading the same. Shri Gopaldas B. has further stated in his affidavit that he was forced to sign the statement and not to ask any question. Further he averred that the statement is not a statement made voluntarily without having any opportunity to know what is written therein. The counsel stated that when such allegation is made in the affidavit on oath, the ITO should have asked in cross examination specifically and pointedly on these averments made in the affidavit. If the statement was recorded and it was neither read or explained to the deponent and he was merely asked to sign the same, such statement loses its evidentiary value. In view of the discussion above, I am convinced that Shri Gopaldas B. cannot be treated as benamidar of his father Shri Bansilal." The first appellate authority also examined the question as to whether Shri Gopaldas was minor as the time of joining the firm M/s. Bansilal & Co. in para 14 of his order and on due consideration of all material facts and evidence on record he gave a finding that his correct date of birth was 12th Jan., 1959 and not 1st Jan., 1962. Para 14 of the order is reproduced below : "This brings to the last issue involved in this case, i.e., regarding the age of Shri Gopaldas B. when he was admitted as a partner of the firm. As stated before, even it the ITO is successful in proving that Shri Gopaldas B. was a minor when he was admitted as full-pledged partner, the firm will not be valid and the registration cannot be allowed to such firm. The ITO has given a note dt. 22nd Nov., 1982 to me during the course of hearing of the appeal. First he relied on the statement recorded by the ADI dt. 22nd Dec., 1979 where according to the ITO Shri Gopaldas admitted his age of about 18 years. From the perusal of the statement made by Shri Gopaldas on 22nd Dec., 1979, I find that the only mention of age is written by the ADI but no question is asked to Shri Gopaldas about his age in the statement recorded on 22nd Dec., 1979. I find that the only mention of age is written by the ADI but no question is asked to Shri Gopaldas bout his age in the statement recorded on 22nd Dec., 1979. The counsel argued that merely because ADIs recorded age as 18 without asking any specific question on the issue, it does not mean that the age of Shri Gopaldas was admitted by him to be of 18 years on the date on which the statement was recorded on 22nd Dec., 1979. The counsel argued that Shri Gopaldass affidavit dt. 22nd Feb., 1981 clearly mentions his age. Evidently the ITO had cross examined Shri Gopaldas on 3rd March, 1981 and he has cross-examined Shri Gopaldas B. after filing the affidavit. The counsel for the assessee brought to my notice that answer to question No. 3 recorded by the ITO in which Shri Gopaldas B. has stated that he was born in Sardarnagar Township of Ahmedabad and his date of birth is 12th Jan., 1959 whereas his birth date in school was 1st Jan., 1962 when he was asked about the LIC policy and the date given to the LIC, he replied that insurance was taken and the date of birth was accepted by the LIC as 12th Jan., 1959 on the basis of horoscope produced by Shri Gopaldas B. and the school certificate was not insisted upon. In his note dt. 22nd Nov., 1962, the ITO has also reasoned out that his age as on 3rd March, 1981 could be taken as 17-18 and 19 and but not more than 19 years. This is probably on the basis that on 3rd March, 1981 Shri Gopaldas was studying in Standard XII. In coming to this conclusion, the ITO must have calculated the age on the basis that Shri Gopaldas must have started studying at the age of 4, 5 or 6 years and since he was studying in XII Standard he added 13 years to the same. Since Shri Gopaldas failed once, the ITO has added one more year. The counsel for the assessee stated that when Shri Gopaldas started studying is a surmise made by the ITO. There was no material on record to show as to what Shri Gopaldas has started studying. The counsel argued that such calculation cannot be even prima facie much less conclusive evidence of the age. The ITO has mentioned that there is yet another independent evidence to prove correct age of birth of Shri Gopaldas as on 1st Jan., 1962 as shown in his school certificate. On 17th Jan., 1968 Shri Bansilal had purchased 40% joint and undivided share in the plot and building and machinery of Ganesh Vijay Pulse Mills under the name of Shri Gopaldas B. for a sum of Rs. 10,000 from one Shri Sherumal Kadumal. On page 2 of the sale deed which was executed on 17th Jan., 1968, the age of Shri Gopaldas is declared as 6 years. The counsel for the assessee stated that the mention of age in the document dt. 17th Jan., 1968 was a narration of age of only on approximate basis. This is because the age was not material for the said document. The only fact which was material at the relevant time was that Shri Gopaldas was a minor. It was argued on behalf of the assessee that some approximate mention of age in the document cannot take place of correct age or date of birth. The ITO also in his note dt. 22nd Nov., 1982 has mentioned that the birth date as per certificate issued by the school shows date as 1st Jan., 1962. The counsel for the assessee stated that it was by mistake that the age of Shri Gopaldas B. was mentioned in the school certificate as 1st Jan., 1962. The counsel for the assessee on the other hand relied on Chhatti Vahi book, LIC policy wherein the date of birth mentioned is 12th Jan., 1959, Shri Bansilals affidavit and mother Smt. Gangabais affidavit, Chhatti Vahi book of the family according to which the date of birth of Shri Gopaldas is 12th Jan., 1959. The counsel for the assessee has heavily relied on the affidavit made by Shri Gopaldas B. It has been brought out that Shri Gopaldas B. was the 4th child of Smt. Gangabai. He has sister in the name of Rajkumari who is 5th child. The date of birth of Rajkumari in Chhatti Vahi book and school leaving certificate is 5th Jan., 1960. It is, therefore, argued that if Rajkumari who is younger sister of Shri Gopaldas was born on 5th Jan., 1960, Shri Gopaldas could have been born earlier to 5th Jan., 1960 and from January to March, 1959. In any case it is clearly proved that the date of birth even in the school was not correct. The ITO in his note dt. 22nd Nov., 1982 has dismissed the affidavit of father and mother as self-serving statement not being documentary record.
Affidavits no doubt can be filed as self-serving statement but at the same time they cannot be summarily rejected as self serving statements.
Once the affidavit is filed, the ITO could have controverted the contents of the affidavit by examining a close relative of Shri Bansilal and could find that whether the averments made by Shri Bansilal and Smt. Gangaben were correct or not. Even the father and mother who have made the affidavits stating that Rajkumari younger sister of Shri Gopaldas B. was born on 5th Jan., 1960 have not been cross examined. In fact, I find that the ITO has accepted the date of birth as 12th Jan., 1959 basing on horoscope of Shri Gopaldas. Even horoscope is not stray document. It is noted in the family horoscope book wherein horoscope of all the persons of the family with birth date are noted. The counsel argued that there was no reason for giving wrong date of birth to LIC as the policy was taken on 10th Nov., 1979 when there was absolutely no dispute about the age of Shri Gopaldas. It may be mentioned that the search took place on 22nd Nov., 1979. The LIC accepted the date of birth on 15th Nov., 1979. The counsel for the assessee has also brought to my notice that independently, it can be shown that Shri Gopaldas B. was a major as on 11th July, 1977. Evidence in the form of driving licence issued by the RTO for scooter. This licence is dt. 11th July, 1978 and Shri Gopaldas could not have been granted the licence for driving scooter unless he was a major as on 11th July, 1978. It was emphasised that when this licence was issued, he had absolutely no idea that the age of Shri Gopaldas will be doubted since this licence was taken much before the search took place, i.e., on 22nd Nov., 1979. The counsel argued that there was overwhelming evidence in the form of family horoscope book, Shri Gopaldass affidavit dt. 2nd Feb., 1981, Shri Gopals cross examination dt. 3rd March, 1981, Shri Gopaldass affidavit dt. 7th Jan., 1962, Shri Bansilals affidavit dt. 2nd Feb., 1981, cross examination of Shri Bansilal dt. 28th Feb., 1981, Smt. Gangabens affidavit dt. 7th Jan., 1982, school leaving certificate of Rajkumari and RTOs driving licence issued on 11th July, 1978 to Shri Gopaldas which go to show the correct date of birth as 12th Jan., 1959.
If the date of birth of Shri Gopaldas is taken as 12th Jan., 1959, when he was admitted as a full-fledged partner on 16th March, 1977, he was major being more than 18 years. Thus, on this ground, the firm cannot be held to be invalid and the registration cannot be denied." The first appellate authority after having given such findings allowed registration to the firm M/s. Bansilal & Co. for the asst. yr. 1978-79.
The Revenue preferred a second appeal before the Tribunal against the order of the first appellate authority. The Tribunal in its order dt.
3rd May, 1991 in ITA No. 849/Ahd/83 confirmed the decision of the CIT(A). According to the assessee no reference application has been filed by the Revenue against the order of the Tribunal.
17. The assessee-firm was constituted as per partnership deed executed on 14th Nov., 1979 by the following : The accounting year of the assessee was Samwat Year. An application for registration in the prescribed form along with partnership deed for the asst. yr. 1979-80 was filed in due time. The assessee-firm also filed a return of income on 28th May, 1979. The Assessing Officer refused registration to the firm for the reasons similar to those obtaining in the case of the firm M/s. Bansilal & Co. for the asst. yr. 1978-79. On appeal the first appellate authority allowed registration to the firm for the asst. yr. 1979-80 relying upon the findings given by him in his order dt. 20th Jan., 1983 in the case of the firm M/s. Bansilal & Co.
for the asst. yr. 1978-79.
18. We find that Smt. Jankiben was accepted as a genuine partner in the case of the firm M/s. Bansilal & Co. by the Revenue for the asst. yrs.
1976-77 and 1977-78. She has also been held as a genuine partner of Bansilal & Co. for the asst. yr. 1978-79 as per order of the first appellate authority. We further find that she has been assessed on the share income from the firm Bansilal & Co. She brought her capital from Bansilal & Co. of Rs. 85,041 as a consideration for becoming the partner in the assessee-firm. There is a material evidence on record to show that income earned by her was ever diverted to her husband directly or indirectly. The first appellate authority has considered other aspects relating to Smt. Jankiben in his detailed order in the case of Bansilal & Co. for the asst. yr. 1978-79. On due consideration of facts and circumstances discussed, we concur with the finding given by the first appellate authority and hold that Smt. Jankiben was a genuine partner of the assessee-firm and not a benamidar of her husband Shri Tharumal.
19. Shri Gopaldas at the time of joining the firm brought as capital amount of Rs. 70,299 from Bansilal & Co. as a consideration for becoming the partner of the assessee-firm. He has also been assessed to income-tax on the share income from Bansilal & Co. and there is no material to suggest that share income earned by him directly or indirectly reached his father Shri Bansilal and he enjoyed its benefits. The other aspects have been considered by the first appellate authority in his order in the case of Bansilal & Co. for the asst. yr.
1978-79 where he gave the finding that Shri Gopaldas was not a benamidar of his father Shri Bansilal. On due consideration of all the facts we find ourselves in agreement with the finding given by the first appellate authority to the effect that he was a genuine partner in the assessee-firm.
20. Now we are left with the last ground on which the Assessing Officer refused registration of assessee-firm and that ground was about the date of birth of Shri Gopaldas. The learned fist appellate authority started disposal of this controversy by rightly observing that if the ITO is successful in proving that Shri Gopaldas was a minor when he was admitted as full-fledged partner, the firm will not be valid and the registration cannot be allowed to such firm. We accordingly have to go in detail as to what is the evidence on record and to conclude as to what is the actual date of birth of Gopaldas.
21. The undisputed facts are that Gopaldas was a student at the time of search which took place at the residential and business premises of M/s. Bansilal & Co. and its partners and other associates. The date of search is admittedly 22nd Nov., 1979. The date of birth of Gopaldas Bansilal in school records is 1st Jan., 1962. The case of the assessee-firm is that this date of birth shown in his school record is not correct one but actual date of birth is 12th Jan., 1959. The evidence which has been given from the side of assessee-firm is from the Chatti Vahi of the family which was produced before the authorities below in which date of birth of family members of Bansilal are shown and the date of birth of Gopaldas is 12th Jan., 1959. The other evidence came from the side of the assessee is that a letter from LIC dt. 6th March, 1981 in which the LIC authorities accepted the date of birth of Gopaldas Bansilal as 12th Jan., 1959 on the basis of horoscope. The other evidence relied upon by the assessee-firm is that the affidavits of Gopaldas, his father and his mother. Lastly the assessee relied upon the driving licence issued on 11th July, 1978 to Gopaldas Bansilal showing the age of said Gopaldas which supports the contention of the assessee that his date of birth is 12th Jan., 1959.
It was also alleged by the assessee-firm that another circumstance which forced the case of the assessee is that the elder sister of Gopaldas is Rajkumari and her date of birth is 5th Jan., 1960 shown in the school record and admittedly she is younger to Gopaldas and in case the date of birth of Gopal is taken on the basis of school record he will be younger to his sister.
22. Contrary to it the evidence which was relied by the LIC is the school certificate and the other piece of evidence is copy of sale deed dt. 17th Jan., 1968 by which father of Gopaldas had purchased 40% joint and undivided share in the plot, building and machinery of Gopal Pulse Mills for a sum of Rs. 10,000 from Serumal Madumal in the name of his minor son Gopaldas. In that sale deed, Gopaldas is shown to be six years and that corroborates the correctness of date of birth shown in the school record. For rest of the evidence relied by the assessee-firm, the contention of the ITO before the first appellate authority was that affidavits of Gopaldas; his father and mother were self serving document as they have been prepared to serve the various tests of their son Gopaldas. It was also pointed out that evidence in the shape of LIC proposal declaring the date as 12th Jan., 1959 was also a device to save the assessee-firm from being refused the registration as the date of birth of Gopaldas as shown in school certificate and as being adopted by his parents was proving Gopaldas as minor on the date of constitution of firm. About the driving licence, it is contended by the learned Departmental Representative that this does not help the assessee as it is not essentially required by the person who applies for driving licence.
23. On the basis of above, it is clear that there are two different sets of evidence before us and the one is based on school record as well as sale deed dt. 17th Jan., 1968 which has been made basis by the ITO to conclude the date of birth of Gopaldas was 1st Jan., 1962.
Undisputedly it is laid down by their Lordships of the Honble Supreme Court in the case of Brij Mohansingh vs. Priya Bret Naransingh & Ors.
(supra) that it often happens that persons give false age at the time of admission to school so that later in life their children would have an advantage when seeking public service for which a minimum age of eligibility is often prescribed, in view of this observation of their Lordships, it was expected from the assessee-firm to prove on record as to why father of Gopaldas gave a false, incorrect date of birth whole getting his son admitted in school In other words, it was bounden duty of assessee-firm to explain that Shri Bansilal got his son admitted in school and at that time reduced the age of his son by three years and that too on the basis of certain compelling circumstances or he kept in mind that reduction of age will be of some use to his son in his further life. We have the copy of affidavit of Bansilal on record which is on page No. 247 of the paper book of the assessee and we have minutely perused the contents thereof. Except by mentioning that he has incorrectly shown the date of birth of his son as 1st Jan., 1962 in place of 12th Jan., 1959, the deponent Bansilal Athumal did not say a single word as to why he has shown this incorrect date of birth. This burden remained undischarged and the assessee-firm cannot be extended any benefit out of the law laid down by their Lordships and relied by the learned counsel for the assessee.
24. Not only this a sort of explanation was evident in the proposal of LIC which was filled in by Gopaldas Bansilal on 15th Nov., 1979 and in that he has shown his date of birth as 12th Jan., 1959 with an explanation that he was born at Alwar on 12th Jan., 1959 and studied at Alwar itself upto third standard and later on shifted to Ahmedabad where he was admitted to first standard and that forced reduction of his age by three years. This explanation would have been the proper one but the assessee did not certify it to be the correct as Gopaldas filed another affidavit the copy of which is appearing on page 235 to 237 of the paper book and in that he denied the contents of the proposal he allegedly made on 15th Nov., 1979 while filling up the proposal form for LIC policy, the copy of which is forming part of order of assessment. He denied the fact that he was born in Alwar and studied there. He explained that he was talking about his sister Rajkumari and Vidya who were born in Alwar and LIC agent misunderstood him and filled in the incorrect information in the said proposal. In other words, this sort of explanation also goes away and it justified the inference drawn by the ITO that this very action of Gopaldas Bansilal and his family members was simply to wriggle out from the complication about his date of birth which was shown as 1st Jan., 1962 in the school records and by the constitution of the firm was going to be invalid on account of Gopal being minor. The conclusion is that the assessee was not able to give out any explanation why the date of birth shown in school records is incorrect and thus no benefit to the assessee on the basis of law relied by the assessee-firm.
25. The other circumstance which fortifies conclusion of the ITO is recital in the sale deed dt. 17th Jan., 1968 through which father of Gopaldas purchased properties in the name of his minor son. Before proceeding further, we may point out that men may speak lie but not the circumstance and here it is a circumstance which demolished the whole of the theory of the assessee. In 1968 when the sale deed was got executed by father of Gopaldas Bansilal, the date of birth of Gopaldas was not matter in issue and ordinarily a person will give out the correct date of birth or its estimation. There the age of Gopaldas is shown as six years and it justified the date of birth shown in his school record which is 1st Jan., 1962. In case the date of birth was 12th Jan., 1959 as is being claimed now then what forced Shri Bansilal father of Gopaldas not to mention the age of his minor son as 9 years and shown 6 years only. It shows that whatever age was shown in 1968 when there was no controversy about the age or date of birth of Gopaldas it should be taken as natural declaration of his father about the age of his son and that circumstance alone is sufficient to repel all the pleas of the assessee.
26. The other circumstance is that on 3rd March, 1981 Gopaldas Bansilal stated to be a student of 12th standard. He also stated that he once failed in 5th standard. It means he must have devoted 13-14 years in the school and college. If we reduce this 13-14 years out of 3rd March, 1981 then the year of entering in the school will be 1967 or 1968. It was again the duty of the father of Shri Gopaldas to explain as to why he got his son admitted to school at the age of 8-9 years. This circumstance again goes to prove the falsity of the claim of the assessee that the date of birth is 12th Jan., 1959 and not 1st Jan., 1962.
27. So far as evidence of assessee is concerned, much reliance is placed on the LIC policy in which date of birth is accepted as 12th Jan., 1959. It is material to point out that the date of search under S. 132 is 22nd Jan., 1979 and proposal of LIC was made on 15th Jan., 1979, just weeks ago. The assessee has not shown when the actual payment of premium of policy was given. Proposal form can be filled and relevant date was actual date of payment of premium which remained missing is no evidence to that effect has been given. Apart from it, it LIC proposal is accepted showing date of birth as 12th Jan., 1959 it is on account of insistence of the policy holder as is evident from letter dt. 6th March, 1981 of Senior Divisional Manager, the copy of which is placed on assessment order itself. So this document is of no consequence as it is prepared by the assessee to help it from the lacuna in the constitution of the firm having minor as partner.
28. The second evidence of assessees driving licence dt. 11th July, 1978 issued by the RTO. The copy of which is appearing on page 229 of the paper book. We are not able to decipher the age of the driving licence holder. However, the learned CIT(A) in his order in the case of M/s. Bansilal & Co. has opined that it was issued on 11th July, 1978 and at that time the assessee must be major and that is why licence was issued. It is material to point out that a person who intends to obtain a driving licence, may submit a certificate from medical practitioner who may estimate his age and if it is more than 18 years, he can be issued driving licence. No authentic document confirming his age is required except doctors report and in case driving licence is issued it does not show that Gopaldas was major on 11th July, 1978.
29. The other evidence is in respect of affidavit of Gopaldas, his father and mother. We have already discussed that important explanations were missing from the affidavit of Shri Bansilal Tharumal.
Mother of the assessee has not given the date of birth as evident from the copy of affidavit of Smt. Gangabai. The affidavit of Shri Gopaldas cannot be taken as believable so far as his date of birth is concerned because he is not expected to know the correct date of his birth.
30. The other circumstance is that Rajkumari is younger to Gopaldas and in case the age of Gopaldas is treated as 1st Jan., 1962 Rajkumari will be elder to her elder brother as her date of birth is 5th Jan., 1960.
Again this is a fact well within the knowledge of parents of the assessee who can go to any extent in creating an evidence and mere assertion of parents of Gopaldas cannot prove that Rajkumari was younger to Gopaldas. The observation of learned CIT(A) in the order deciding the appeal of Bansilal & Co. which has been made basis for deciding this controversy also, to the fact that the ITO should have enquired from the relatives of Gopaldas to ascertain this fact is not a correct approach as it was assessee who should have filed documentary evidence to support that fact and except the affidavit of Gangabai and family book nothing is on record. So this circumstance was not going to help the assessee. Lastly reliance was placed on copy of family Chatti Vahi (horoscope) consisting of date of birth of all the children. Again this is prepared by family members and it can be manipulated to suit their requirement. There is nothing in the affidavits that horoscope of Shri Gopaldas was prepared at the time of his birth and name of person who prepared it is also not disclosed. In the absence of these vital facts, this Chatti Vahi in respect of Gopaldas will not be helpful.
31. On the basis of what had been discussed above we are of the opinion that the learned ITO appreciated the facts and circumstances correctly and arrived at the correct conclusion holding that date of birth of Gopaldas was 1st Jan., 1962, as is shown in the school records and in other document and being treated by father of Gopaldas Bansilal as such. The evidence from the side of the assessee was manipulated and unbelieving one. The learned first appellate authority wrongly relied on that evidence. Once date of birth of Gopaldas is 1st Jan., 1962, admittedly the constitution of the firm on 12th Nov., 1977 was not valid. The assessee was not entitled to get registration in the asst.
yr. 1979-80 and subsequent years on this very ground. Accordingly the appeals of the Revenue are allowed and the order of ITO is confirmed.