TMI Blog2011 (1) TMI 1402X X X X Extracts X X X X X X X X Extracts X X X X ..... lant's case, in upholding the addition of ₹ 9,62,333 made by the Assessing Officer (AO) u/s 68 of the IT Act out of fresh capital introduced at ₹ 14,62,333 by one of the partners during the year. 1.1 The learned CIT(A) erred, on the facts and in the circumstances of the Appellant's case, in coming to the conclusion that the details furnished before him ( CIT(A) ) were additional evidence and that additional evidence cannot be considered by him. The learned CIT(A) erred in not appreciating that explanation of capital introduced was furnished to the AO and that the law did empower him to take additional information / evidence into consideration while disposing of the appeal before him. 1.2 The learned CIT(A), i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acturing unit of the assessee is located in the Union Territory of Daman, which is a back-ward Union Territory as specified in the VIII Schedule to the I.T. Act. 4. In assessee s appeal the only issue involved is that of share capital introduced by the partner in the firm. During the course of assessment proceedings the AO found that Shri Dipak Soni a partner has introduced capital of ₹ 14,62,333/- as under :- i By cheque ₹ 8,08,948/- ii By cash ₹ 3,00,000/- iii By transfer entry Rs.3,53,385/- Total Rs.14,62, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of capital introduced by the partner be directed to be deleted. 7.6 I have perused the facts of the case. The details now submitted before me are admittedly additional evidences under Rule 46A. It seems that the AO vide letter dated 31.01.2007 and order sheet dated 4.12.2007 and 10.12.2007 had asked the appellant to furnish the sources of capital introduction. The appellant has not submitted before me any justification that prevented him to furnish the above explanations documents before the AO during the course of assessment proceedings. Since the appellant failed to furnish the above details during the course of assessment proceedings the details submitted before me now cannot be considered for adjudication since the same being in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nation given on behalf of the assessee in respect of the new deposits or cash credits in the accounts of the partners. The mere non-acceptance of that explanation does not, however, provide material for finding that the said sum represented income of the assessee firm. As held by the Allahabad High Court in case of Commissioner of Income Tax, Allahabad v. Jaiswal Motor Finance (supra), in the absence of any material to indicate that there were profits of the firm, the amount credited to the partners' accounts could not be assessed in the hands of the firm. Once the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 of the Income-tax Act, 1961, the first burden is on the assessee to satisfactorily explain the credit entry in the books of account of the previous year. If the explanation given by the assessee is satisfactory, then that entry will not be charged along with the income of the previous year of the assessee. In case the explanation offered by the assessee is not satisfactory or the source offered by the assessee-firm is not satisfactory, then in that case, the amount should be taken to be the income of the assessee. Once it is established that the amount has been invested by a particular person, be he a partner or an individual, then the responsibility of the assessee is over. Whether that person is an income-tax payer or not and wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed as business profit for the purpose of deduction under section 80IB. The AO disallowed a sum of ₹ 7,25,031/- on account of non-deduction of tax. The assessee had made the payments to various parties but had not deducted the tax thereon. The payment was disallowed as per provisions of section 40a(ia). He also disallowed the claim of deduction under section 80IB on such addition, arguing that the addition is not business profit and, therefore, assessee is not eligible for such deduction. 9. The ld. CIT(A) allowed the claim of the assessee holding it to be a business income. 10. We have heard the parties and carefully perused the material on record. The issue is directly covered in favour of the assessee by the decision of the Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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