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2020 (5) TMI 188 - AT - Income TaxAddition u/s 69 - deposit made into the partnership firm by partners - business had not commenced or just commenced - HELD THAT:- As decided in SMT. PK NOORJAHAN [1997 (1) TMI 6 - SUPREME COURT] where any assessee had not carried on any business activity, it cannot be presumed to have earned any income Assessee has not carried on any business activity and earned any income. In such circumstances, it could only have received capital contribution from the partners. Capital contribution by the partners cannot be treated as income of the assessee and if the partners are not able to explain the sources for their investment, the AO can only make the addition in the hands of the partners and not in the hands of the assessee firm. Further in the dissolution deed of the assessee firm dated 10/04/2000 also, there is a mention of the return of the capital and this deed is not disputed by the AO. Addition made in the hands of the assessee firm is not justified and, therefore, the said addition is deleted. - Decided in favour of assessee.
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