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THE PR COMMISSIONER OF INCOME TAX, HYD Versus M/s R.K. AND COMPANY, HYD

2016 (6) TMI 112 - ANDHRA PRADESH HIGH COURT

Addition of unexplained cash credits - Held that:- Section 68 of the Act stipulates that, 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 explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income tax as the income of the assessee of that previous year.

In the present case, the assesse .....

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903/- to the income of the firm as these credits have been explained by the firm as having been introduced as capital by Sri Ch.Rajendra Kumar, a partner. - I.T.T.A.No.571 of 2015 - Dated:- 6-1-2016 - SRI RAMESH RANGANATHAN AND SRI M.SATYANARAYANA MURTHY, JJ. FOR THE PETITIONER : PRASAD (SC FOR INCOME TAX) JUDGMENT: (per Hon ble Sri Justice Ramesh Ranganathan) This appeal, under Section 260-A of the Income Tax Act, 1961 (for short the Act ), is preferred against the order passed by the Income Ta .....

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the matter to the Assessing Authority. Thereafter, the Assessing Authority examined the balance sheet and found that a sum of ₹ 90,46,903/- was credited to the capital account of Sri Ch.Rajendra Kumar, a partner of the assessee-partnership firm, during the year under consideration. The assessee-firm was called upon to furnish certain information regarding the capital introduced in the name of the partner Sri Ch.Rajendra Kumar. The Assessing Authority observed that, despite giving numerous .....

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evidence, explaining the sources, the said amount of ₹ 90,46,903/- should be added under Section 68 of the Act as they did not fulfil the ingredients to substantiate the cash credits. Aggrieved thereby, the assessee carried the matter in appeal to the Commissioner of Income Tax (Appeals) who dismissed the appeal holding that the total deposits in the bank account were much more than even the gross receipts of Sri Ch.Rajendra Kumar in both his individual and HUF capacity; and, therefore, t .....

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ling the conditions of Rule 46-A, there was no scope to make addition in the hands of the firm; what the Assessing Officer was asking the firm to prove was the source in the hands of Sri Chaitanya Kumar, which could only be done in his assessment which was accepted as such; as far as the partnership firm is concerned, it had discharged its onus, and could not be expected to provide the source of funds of a third person; and in view thereof, the genuineness of the credits were accepted, and the a .....

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