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TMI Blog2011 (3) TMI 1442X X X X Extracts X X X X X X X X Extracts X X X X ..... the Transport Plaza for the Nagpur Improvement Trust was undertaken by M/s. S. K. Banerjee firm. This firm transferred the entire work to a new firm known as "M/s. S. K. Banerjee, J.V. Transport Plaza" (hereinafter referred to as "the J. V. Firm" for short), which was formed for completion of the job of the Transport Plaza allotted to M/s. S. K. Banerjee firm by addition of two additional partners, namely, Shri Surendra Golechha and Shri Abhishek Golechha. The entire expenditure incurred for purchase of materials, etc., up to December 4, 2004, for Rs. 1,71,51,161 was transferred to M/s. S. K. Banerjee J. V. Transport Plaza, i.e., the assessee-firm and the amount was credited to the current capital account of the partner of M/s. S. K. Banerj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bills and no depreciation has been claimed either by M/s. S. K. Banerjee or M/s. G. and B. Infrastructure on the same. Depreciation has been claimed only for six months on these fixed assets. The Commissioner of Income-tax (Appeals) further found at the time of transfer of the project by M/s. S. K. Banerjee to the assessee, credit was given by a journal entry in the books of the assessee-firm to the capital account of M/s. S. K. Banerjee and simultaneously, the entire expenditure transferred was debited to the respective account in the books of the assessee. The audited balance-sheet, as on March 31, 2005, was also perused and the Commissioner of Income-tax (Appeals) found that the amount of Rs.1,71,78,161, which is an investment in the new ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... event occurred even before the issue of notice under section 143(2) in the case of the assessee for the assessment year 2005-06. The bills for labour charges were raised in the subsequent years, i.e., the assessment year 2006-07 according to the arrangements between the parties." 4. The Commissioner of Income-tax (Appeals) thus came to the conclusion that there is no transfer of funds involved from the incoming partner of M/s. S. K. Banerjee and the credit is raised in the partners' capital account by way of a journal entry and that the Assessing Officer has misinterpreted the entry in the books of account made on December 31, 2004, and held that the debit note in respect of transfer of material by the partner of M/s. S. K. Banerjee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he amount has been invested by a particular person, he being a partner or an individual, then the responsibility of the assessee-firm is over and that in the instant case the assessee has successfully established the source of the credit entry in the partners' capital account. Accordingly, it has been held that the burden of the assessee has been fully discharged and dismissed the appeal. 6. Mr. Parchure, learned advocate for the appellant, submitted that the addition is contrary to section 68 of the Income-tax Act which reads as follows : "68. Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explana ..... X X X X Extracts X X X X X X X X Extracts X X X X
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