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2022 (5) TMI 615 - AT - Income TaxAdditional ground raised before the ld. CIT(A) which was not considered during appellate proceedings - iolation of Rule 46A of the Income Tax Rules, 1962 by stating that Income-tax Non Statutory Form-51 [ITNS-51] is not sufficient - HELD THAT:- In the case of Ramco Cements Ltd. [2014 (11) TMI 447 - MADRAS HIGH COURT] as directed the ld. CIT(A) to consider the additional ground which was raised before the ld. CIT(A) and which was not considered during appellate proceedings, as the assessee in that case has given certain reasons with records to show that it was a bonafide claim but out of inadvertence, it was not stated in the return of income, whereas, the matter was not remanded to the Assessing Officer on the pretext that the Assessing Officer is not empowered to adjudicate a claim which was not claimed in the original return of income or by way of revised return. We are of the considered opinion that the ld. CIT(A) has perfectly assumed the jurisdiction by exercising of powers conferred upon him under section 250(4) of the Act read with sub-rule (4) of Rule 46A of the Income Tax Rules to adjudicate the ground raised in the appeal based on the materials available on records. We find no infirmity in the order passed by the ld. CIT(A) on this issue and accordingly, the ground raised by the Revenue is dismissed. Addition u/s 68 on unexplained capital - HELD THAT:- Figures of Balance Sheet reported by the assessee firm while filing its return of income for the impugned assessment year are erroneous and is a result of mistake committed by the assessee firm. The only basis for making the addition by the Assessing Officer was purely on the basis of amounts reflected in the return of income and not with reference to any other documentary evidence. Thus, the addition made by the Assessing Officer is erroneous for the reason that the basis for making the addition itself is erroneous and liable to be deleted. Whether the unexplained partners’ capital is assessable in the hands of the assessee or not in terms of section 68? - Whether the partners’ capital is assessable in the hands of the assessee firm has been adjudicated by various Benches of the Tribunal as well as various courts and held that there cannot be any addition in the hands of the assessee firm on account of capital contribution by its partners. See INDIA RICE MILLS VERSUS COMMISSIONER OF INCOME-TAX [1995 (12) TMI 55 - ALLAHABAD HIGH COURT] and M/S. M. VENKATESWARA RAO & OTHERS [2015 (3) TMI 153 - ANDHRA PRADESH HIGH COURT] Thus the capital introduced by the partners cannot be taxed in the hands of the assessee-firm under section 68 - we are of the considered opinion that the ld. CIT(A) has fully justified in deleting the addition made under section 68 of the Act. Thus, the appeal filed by the Revenue is dismissed. Penalty levied under section 271(1)(c) - Once quantum addition has been deleted at appellate stage and duly confirmed by the Tribunal hereinabove, the penalty levied under section 271(1)(c) of the Act could not survive. Accordingly, the appeal filed by the Revenue is dismissed.
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