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2023 (4) TMI 137 - AT - Income TaxUnaccounted and Unexplained cash credit u/s 68 - capital introduced by partners - CIT-A deleted the addition - HELD THAT:- There are no adverse remarks of the AO regarding source of capital introduced by the partners in the assessee firm except for the fact that no documentary evidences were furnished by the assessee during the course of assessment proceedings to justify the source of capital introduced by the partners. On merits, we find that the assessee filed ample corroborative documentary evidences such as confirmation of accounts, bank statements and income-tax returns of the partners along with the copy of capital/ ledger account of the partners in the books of the firm, M/s Motilal Gopikishan and thus, the assessee satisfactorily discharged the primary onus cast upon it under section 68 of the Act. There was no justification for making addition to the total income of the assessee on account of capital introduced by its partners since the assessee duly justified the identity and creditworthiness of the partners as well as genuineness of the transactions as entered into with them. We also find force in the contentions that assessment in the case of two of the partners was also completed by the same Assessing Officer wherein the AO did not take any adverse view in respect of the amount of capital introduced in the assessee firm which in itself justified that the AO was satisfied with the source of capital introduced in the assessee firm. Assessment in the case of the partnership firm from where the partners of the assessee firm withdrew cash/ obtained loan and thereafter introduced capital in the assessee firm was also completed by the same Assessing Officer and that no adverse view was taken in the case of partnership firm in respect of the amount withdrawn by the partners for contributing capital in the assessee firm which further justified that the AO was satisfied with the source of capital introduced in the assessee firm - no reason to sustain addition to the total income of the assessee on account of capital introduced by partners since source of capital introduced by the partners stood duly explained. Addition made by the Ld. AO on account of capital introduced by partners cannot be said to be justified in view of the observations made hereinabove. Appeal filed by the Revenue is dismissed.
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