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2020 (11) TMI 216 - AT - Income TaxUnexplained cash credit u/s 68 - initial burden to prove the cash - prove of three main ingredients, viz., identity of the creditor, creditworthiness of the creditor and genuineness of the transactions - HELD THAT:- The assessee has introduced a sum of ₹ 1.60 crores in his capital account. The source of the above said amount was the withdrawal made by the assessee from a firm named M/s Shri Banadeshwar Constructions”, wherein the assessee is a partner. There is no dispute with regard to the fact that a partnership firm by the above said name was formed by nine persons including the assessee. The remaining eight partners are farmers and they have introduced capital in the partnership firm. Hence the partnership firm was having enough funds and the assessee has withdrawn money from the above said partnership firm.We notice that the assessee has furnished details relating to receipt of compensation, bank account details of other partners etc. The AO also did not find fault with those documents, meaning thereby, the assessee has also proved source of sources. The assessee has proved the sources of funds, i.e., it was withdrawal from the partnership firm. The partnership deed, the books of accounts of the firm, its fund position examined by the AO would show that the assessee has proved identity, credit worthiness and genuineness of the transactions. Though the AO has expressed the view that the partnership firm is a colourable entity, yet we notice that the AO has observed so on surmises only. The capital contribution made by the other partners has not been established to be not genuine. In fact, the AO was satisfied with the capacity of the other partners to make the capital contribution. Though he has expressed that there is time gap of six months etc., yet it was again a surmise only not supported by any material to show that the amount introduced as capital was not the amount withdrawn from the banks. In fact, the decision rendered in the cases of P. Padmavathi [2010 (10) TMI 1154 - KARNATAKA HIGH COURT] and S.R Venkata Ratnam [1980 (8) TMI 73 - KARNATAKA HIGH COURT] would reject the apprehension of the AO. Thus, we notice that the assessee has not only proved the source, but also source of sources. Hence we are of the view that the Ld CIT(A) was justified in deleting the addition - Decided in favour of assessee.
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