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2015 (6) TMI 390 - ITAT AHMEDABAD

2015 (6) TMI 390 - ITAT AHMEDABAD - TMI - Addition in respect of opening capital balance as on 1st April, 2004 - Held that:- The assessee appears to be partnership firm as per the balancesheet, but filed the return for the year under consideration in the status of HUF. In the account of the partners, there is Addition of opening capital balance as on 1st April, 2004 - Held that:- Opening balance but the assessee did not file the return of the partnership firm for Assessment Year 2004-05, though .....

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the decision of the Hon’ble Jurisdictional High Court in the case of Pankaj Dyestuff Industries (2005 (7) TMI 601 - GUJARAT HIGH COURT ), would not be applicable to the case of the assessee. Considering the facts of the case and the arguments of both the sides, we do not find any justification to interfere with the order of the CIT(A) on this point and the same is sustained. - Decided against assessee.

Disallowance of expenses - Held that:- CIT(A) considered each and every expenses a .....

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irect that the disallowance be restricted to ₹ 7,53,987/-. - Decided partly in favour of assessse. - ITA No. 3278/Ahd/2009 - Dated:- 15-5-2015 - Shri G.D.Agrawal and Shri Rajpal Yadav, JJ For the Petitioner: Shri Hardik Vora, AR For the Respondent: Shri Roop Chand, Sr. DR. ORDER PER G.D. AGRAWAL, VICE PRESIDENT: This is an appeal filed by the assessee and is directed against the order of the Commissioner of Income-tax(Appeals)-II, Baroda dated 22.09.2009 pertaining to the Assessment Year 2 .....

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ome-tax (Appeals) erred in law and on facts in recording the following finding in para 4.2, page No. 5 of his order as below: "In appeal the learned Authorized Representative withdrew his claim of being a proprietary concern and admitted to being a partnership firm." 3.0 The learned Commissioner of Income-tax (Appeals) erred in law and on facts in dismissing the ground of appeal relating to an addition of ₹ 1,00,000/- u/s 68 on the basis that the same was not pressed 3. Ground No .....

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ng Officer found that the assessee is a partnership firm and its partners are Shri Navnitbhai B Patel and Shri Viral N Patel. In view of these facts, the Assessing Officer assessed the assessee namely M/s. Patel Beverages as partnership firm and tax rate applicable to the firm have been charged, though the return has been filed by the assessee as HUF. The Assessing Officer further noticed that in the balance-sheet enclosed alongwith return of income for Assessment Year 2005-06, the assessee has .....

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before the CIT(A), the assessee pointed out that the return of income of the partners was filed for Assessment Year 2004-05; however, on verification of the return, he found that the return was filed by Shri Navnitbhai B Patel-individual and there is no evidence of these amounts showing as closing balance in that year. The relevant finding of the CIT(A) reads as under:- 3.3…. To explain the source of this contribution, the appellant sought to show that a return of income of the partnersh .....

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has been running its business in the status of a firm since the year 2000. However, no return of income has been filed by the firm. It is also seen that no confirmation has been filed form Shri Viral N. Patel claiming the source of the credit entries in the capital account. In view of the fact that there is no evidence on record to explain the credit entries of ₹ 8,08,938/-, the addition made by the Assessing Officer is confirmed. Through the amount discussed in the body of the order is & .....

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d cash credit of the firm. In support of this contention, he relied upon the decision of the Hon ble Jurisdictional High Court in the case of CIT vs. Pankaj Dyestuff Industries vide Income Tax Reference No.241 of 1993. However, when at the time of hearing the Bench asked the assessee to prove that the partnership firm filed the return of income for Assessment Year 2004-05 in which there is a closing balance in the account of both the partners amounting to ₹ 4,04,469/- each, the assessee wa .....

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ils which would discharge the onus which lay on the assessee. It is not the case of the revenue that the partners of the assessee firm are fictitious. The income-tax officer has not disputed that the credits in the accounts of the partners were not deposits from the partners. Moreover, it is an admitted position that this was the second year of the firm, and that it was running in loss. It is true that the Income-tax Officer did not accept the explanation given on behalf of the assessee in respe .....

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he partners have owned that the monies deposited in their accounts are their own, the Income-tax Officer is entitled to and may proceed against the partners and assess the same in their hands if their explanation is not found satisfactory. 14. In the facts and circumstances of the present case, both the Deputy CIT (Appeals) and the Tribunal have found that the assessee had discharged the primary onus which was on it by offering explanation, which has not been found to be incorrect or false in an .....

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ount of the partners was not in dispute. However, in the case of the assessee, the series of incident raises serious doubt about the genuineness of the partnership firm as well as the credit balance in the account of the partners. The assessee appears to be partnership firm as per the balancesheet, but filed the return for the year under consideration in the status of HUF. In the account of the partners, there is opening balance but the assessee did not file the return of the partnership firm fo .....

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2004-05. In these peculiar facts, the decision of the Hon ble Jurisdictional High Court in the case of Pankaj Dyestuff Industries (supra), would not be applicable to the case of the assessee. Considering the facts of the case and the arguments of both the sides, we do not find any justification to interfere with the order of the CIT(A) on this point and the same is sustained. Accordingly, Ground No.4 of the assessee s appeal is rejected. 8. Ground No.5 of the assessee s appeal reads as under:- .....

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70 3 Consulting expenses 178690 4 Legal and professional charges 139631 5 Freight outward expense 399463 6 Security charges 60000 Rs.9,74,514 10. The Assessing Officer made the disallowance on the ground that the assessee failed to deduct the TDS on the above payments and therefore, applying the provisions of Section 40(a)(ia), he made disallowance. On appeal, the CIT(A) recorded the finding that, considering the nature of expenses, there was no liability upon the assessee to deduct TDS and ther .....

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T(A) considered each and every expenses and has sustained the disallowance only when the expenditure was not allowable. The ld. Counsel for the assessee was unable to controvert the findings recorded by the CIT(A). Accordingly, the same is sustained and Ground No.5 of the assessee s appeal is rejected. 12. Ground No.6 of the assessee s appeal, which reads as under, was not pressed by the ld. Counsel at the time of hearing. Accordingly, the same is rejected as not pressed. 6.0 Without prejudice t .....

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