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2019 (11) TMI 916 - AT - Income TaxAddition u/s 68 - unexplained capital introduced by members of AOP - on perusal of the partners/members capital account for the year ended 31st March, 2011, AO observed that members have introduced huge amount of capital in the assessee’s business - HELD THAT:- We find that the AO has given adequate opportunity to the assessee during the course of assessment proceedings to furnish the documentation in support of the capital introduction by Sh. Yogindra Singh Chouhan - notice u/s 133(6) was also issued which remained uncomplied with and even during the remand proceedings, there is nothing which has been filed or brought on record in support of the substantiating the source of capital contribution by Sh. Yogindra Singh Chouhan. There is movement in his personal account maintained with the assessee’s AOP, however, the fact of the matter is that the explanation regarding the source of the capital introduction by way of cash and the creditworthiness of Sh. Yogindra Singh Chouhan remained unsubstantiated till date and initial onus cast on the assessee is not satisfied in the instant case. No infirmity in the action of the lower authorities. Hence, the addition of ₹ 13,00,000/- is hereby sustained. In respect of Sh. Bhanwar Singh Makori who has contributed ₹ 15,00,000/- towards his capital contribution, the ld. CIT(A) has not accepted the contention of the assessee stating that the assessee has failed to prove his creditworthiness. Before us, it was submitted that he was produced for verification and his statement was also recorded during the course of remand proceedings where he has accepted to have given an amount of ₹ 15,00,000/- in cash by way of his capital contribution. On perusal of his financial statement for the year ended 31.03.2011, we find that he has a capital of over ₹ 1 crore and in the said financial statement, he has also reported his investment in the assessee’s AOP. We therefore find that the assessee has discharged the necessary burden cast on it in terms of satisfying the creditworthiness of Sh. Bhanwar Singh and the addition of ₹ 15,00,000 so made is hereby directed to be deleted. In respect of Sh. Mota Ram Saini, the ld. CIT(A) has rejected the contention of the assessee stating that he was neither produced in person nor any confirmation was filed before the Assessing Officer. In this regard, the ld. AR submitted that Sh. Mota Ram Saini has filed an affidavit by way of confirmation wherein he has stated that he has agriculture land holding of 20 bighas and his agriculture income is about ₹ 50,000/- per annum and he has yearly income of about ₹ 1,50,000/- for F.Y 2010-11 and out of his current year income and past savings, he has contributed ₹ 2,00,000/- towards his share in the capital of the assessee’s AOP. We find that the contents of the affidavit have not been disputed by the Revenue and considering the same, the addition of ₹ 2 lacs is directed to be deleted. Regarding the capital contribution Sh. Iqbal and Sh. Iqram, it is noted that they were produced for verification during the remand proceedings and in their statement, they have confirmed to have given an amount of ₹ 1,00,000/- each as capital contributions and have also explained the source of their capital contribution by way of income and past savings. In the light of the same, the addition so made is hereby directed to be deleted. - Decided partly in favour of assessee
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