Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2017 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (4) TMI 1192 - AT - Income TaxUnexplained cash deposits in Assessee’s bank Account - Held that:- Undisputedly the assessee had deposited cash into his bank account and has explained the source to be the payments received from the debtors of the firm. Since the assessee was the proprietor of the business prior to its conversion into a partnership firm and since he continues to be the Managing Partner of the firm, we are inclined to accept the assessee’s contentions that the debtors of the firm issued cheques in his name or that they paid in cash to the assessee. The assessee had submitted before the AO that this amount was shown in the books of the firm as loans and advances, while it is shown as payable in the assessee’s books of account. This contention of the assessee has not been verified by any of the authorities below. The AO has brushed it aside on the ground that the copies of the ledger extracts are prepared by the assessee himself/the firm as per his/their convenience and therefore not reliable. The assessee has filed the copy of the Partnership Deed and we find that the partners inducted are not in any way related to the assessee and also they are entitled to equal share of profit as the assessee. In such circumstances, it cannot be held that the books of the firm are prepared as per the convenience of the assessee. Thus we deem it fit and proper to remand this issue to the file of the AO for re-examination de novo in accordance with law. Unexplained investment - Held that:- We find that the CIT (A) has reproduced the capital account of the assessee in the books of M/s. Filmors wherein the capital brought in is shown as ₹ 32.00 lakhs and the opening balance is shown as ‘Nil’ and the closing balance at ₹ 19,32,370.50. As per the partnership deed, all the partners have equal sharing ratio and it is seen that the other partners who have joined the firm along with the assessee have introduced ₹ 18,50,000/- each and there are withdrawals by them too. The AO has sought explanation for the capital introduced and we see no reason to interfere with the findings of the authorities below as such findings are based on the audited books of the firm M/s Filmors. As regards the source for such capital, we are of the opinion that this needs reverification, as we have remanded the issue of the sources for the cash deposits to the AO to verify the books of M/s. Samaritan Agencies and the bank deposits to see whether the assessee was in fact in receipt of the payments from the debtors of M/s. Samaritan Agencies. The AO, therefore, shall also examine if the assessee was in receipt of the amounts from the debtors of M/s. Samaritan Agencies, the amount which was collected and whether it was sufficient source for both cash deposits as well as the capital introduction in M/s. Filmors. This ground of appeal is accordingly treated as allowed for statistical purposes only with regard to the source of the capital.
|