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2015 (10) TMI 409 - ITAT AHMEDABAD

2015 (10) TMI 409 - ITAT AHMEDABAD - TMI - Addition u/s.68 - unexplained partners capital - Held that:- We are of the view that the proceedings qua the addition of ₹ 1.985 crores is difficult to resolve conclusively unless the outcome of the Settlement Commission proceeding are ascertained.A perusal of the Honíble Bombay High Courtís interim-order dated 12.3.2015 on the petitions of the partners reveals that these petitions were to be placed for final hearing board in the week commencing f .....

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t Appellate Authority will be at liberty to proceed in accordance with law.

As far as other two issues are concerned, both the parties have conceded that these issues may also be restored to the file of the ld. First Appellate Authority for fresh adjudication, because, the addition u/s.68 has a link with Settlement Commission proceedings. The books were seized by the DRI, therefore, relevant material was not produced. The ld. AO disallowed ₹ 1,00,000/- on account of non-filing o .....

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7; 84 lakhs made under section 68 of the Income Tax Act. - Decided in favour of assessee for statistical purpose. - ITA No.3401/Ahd/2009, ITA No.32/Ahd/2010 - Dated:- 27-8-2015 - SHRI RAJPAL YADAV AND SHRI ANIL CHATURVEDI, JJ. For The Appellant : Shri D.C. Mishra, Sr.DR For The Respondent : Shri Tushar Hemani ORDER PER RAJPAL YADAV, JUDICIAL MEMBER: Assessee and Revenue are in cross-appeal against the order of ld.CIT(A)-II, Surat dated 4.9.2009 passed for Asstt.Year 2003-04. 2. The assessee has .....

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he ground nos.3, 4 and 5 are only substantial ground. They read as under: 3. On facts and circumstances of the case, the ld.CIT(A) has grossly erred in upholding the addition u/s.68 of the Act for unexplained partners capital of ₹ 1,98,50,000/- as made by the ITO in the hands of the appellant fir, which is not only factually erroneous but also bad-in-law and hence, needs to be deleted. 4. On facts and circumstances of the case, the ld.CIT(A) has grossly erred in restricting the addition of .....

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rounds, out of which, grounds no.2 and 3 are general grounds of appeal. In ground no.1, the Revenue has pleaded that the ld.CIT(A) has erred in deleting the addition of ₹ 36 lakhs, which were made with the aid of section 68. In fact, this ground is inter-connected with ground no.4 of the assessee s appeal. 6. The ld. AO has made addition of ₹ 84 lakhs on account of unexplained credit. The ld.CIT(A) has restricted this addition to ₹ 48 lakhs. The addition which has been confirme .....

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the course of survey, unaccounted income of ₹ 5.00 crores was disclosed in different cases of the firm for different assessment years. The ld. DDIT(Inv) transmitted information to the AO of the assessee that it is one of the beneficiaries of introduction of bogus capital in the year under assessment. The ld. AO has reopened the assessment by issuing notice under section 148 of the Act. It revealed to the AO that partners have introduced capital in the following manner: a) Mohanbhai D Patel .....

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d for the reason that Mohanbhai D. Patel, one of the partners owned these unsecured loans. 11. The ld.counsel for the assessee, at the very outset, submitted that the assessee is engaged in the business of manufacturing and selling of grey cloth. This is the first year of the operations of the assessee-firm. It has installed 40 looms in the year under consideration, and has achieved a turnover of ₹ 1,38,68,523/-. It has shown GP at the rate of 15.10%. The ld. AO has made addition of ₹ .....

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secured loan of ₹ 48 lakhs is concerned, the assessee has filed confirmation, but such confirmation has been rejected by the CIT(A) on the ground that the assessee sought to place on record the confirmation by way of additional evidence. He further contended that partners have approached Hon ble Settlement Commission by way of application under section 245C. The Hon ble Settlement Commission has admitted the petition of Kiritbhai M. Patel and rejected the petitions of other two partners. B .....

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aced on record copy of the Hon ble High Court order dated 12.3.2015. The Hon ble Court has observed that these petitions be taken up for final hearing board in the week commencing from 6.4.2015. Thus, the petition can be disposed of on any day. According to the ld. Counsel for the assessee, the outcome of the settlement commission proceedings has bearing on the decisions of these appeals. 12. The learned DR, on the other hand, contended that the assessee is not before the Settlement Commission. .....

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e petition in the Settlement Commission are being accepted, and taxability of the amount in their hands is resolved, then, it will be easy to ascertain whether the partners have source of funds for making capital contribution. Therefore, the outcome of the Settlement Commission proceeding has a bearing in the present case. 14. As far as the addition on account of unsecured loan of ₹ 84 lakhs is concerned, it emerges out from the record that the assessee has opened 150 fictitious bank accou .....

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bmitted that confirmations filed by the assessee along with PAN of depositors have not been considered by the Ld. CIT(A) simply for the reasons that these details were not produced before the AO. 17. In the next ground, the grievance of the assessee relates to ad hoc disallowance of ₹ 1.00 lakh out of the Misc. expenses. According to the ld. counsel for the assessee, all vouchers were shown to the auditors, who have verified the accounts, and therefore no disallowance is to be made. 18. On .....

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meaning thereby, the writ petitions are on the board of Hon ble High Court and likely to be disposed of on an early date. Therefore, we deem it appropriate to set aside this issue to the file of the CIT(A) for re-adjudication. The ld. First Appellate Authority will take up the proceedings preferably after ascertaining of outcome of the settlement petitions. In case the outcome is not brought to the notice of ld. First Appellate Authority, within reasonable period, then the ld. First Appellate A .....

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