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TMI Blog2017 (1) TMI 1207X X X X Extracts X X X X X X X X Extracts X X X X ..... holding that the cash credits of Rs. 22.46 lacs are not genuine? (ii) Whether under the facts and circumstances of the case the Ld. Tribunal was justified in confirming the additions of Rs. 22,46,000/- under Section 68 when the confirmations and identity of such cash creditors were assessed with the same Assessing Officer and no attempt under Section 131 was made by the Assessing Officer?" 3. Counsel for the appellant Mr. Gupta has taken us to the order of the CIT(A) and contended that the observations are made by it at page 38. 3.1. The observation of the CIT(A) are as under: "I have considered the arguments of both the sides and the evidences produced during the course of appellate proceedings. I have also considered the various ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he books of the firm through the capital account of the partners and it is found as a fact that the cash was received by the firm from its partners, then, in the absence of any material to indicate that these were the profits of the firm, it could not be assessed in the hand of the firm. This is so because in such a case the onus placed on the assessee firm by section 68 of the IT Act could be deemed to h ave been discharged. (CIT Vs. Jaiswal Motor Finance 141 ITR 706, All.) The fact that an assessee was unable to satisfy the authorities as to the source from which the depositor received the money cannot be used against the assessee. (CIT Vs. Daulat Ram Rawat Mull 87 ITR 349 SC). If the firm has satisfactorily explained the nature and sourc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 25 creditors are assessed to tax since past sevral years and have incomes from various businesses such as trading in consmetics, kirana goods, garments etc., running printing press and agency of life insurance etc. besides income from house rent, interest, salary and agriculture. Though it has been alleged by the AO that no interest has been paid to the depositors by the partners but actually interest has been duly paid by the partners on the loans obtained by them from these creditors. The returns filed by these creditors have also been accepted by the AO who incidentally is the AO of the firm. There is no evidence on records brought by the AO to indicate that the funds brought in by the partners as the capital were from the profits of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds as under: "We heard the rival submissions and perused the materials available on record. The assessee firm has received the cash credits of Rs. 23.46 lacs as capital of partners out of which Rs. 1.00 lac has been paid back thus, retaining Rs. 22.46 lacs. The source of the said amount by the partners was the sum received from almost all the twenty five ladies to each partners in cash and each deposit was less than Rs. 20,000/- during the year and total of the balance sheet of each lady was Rs. 1.00 lac approximately and total amount advanced to all the partners together was almost the same amount i.e. Rs. 1.00 lac. The returns of income of all these ladies were filed on the same date through one advocate. As per the notes in the balance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the AO. We rely upon the decision in the case of Jagmohan Ram Chandra Vs. CIT, 274 ITR 405 (All) Wherein it has been held that if an entry of cash credit is found in the books of account of a firm, it is for the firm to give an explanation regarding their identity and source of such deposits and if the explanation is disbelieved then it is to be added as an income u/s 68 of the Incometax Act, 1961, in the hands of the firm. We also rely upon the decision of Hon'ble Jurisdictional High Court in the case of CIT Vs. Kishorilal Santoshilal, 216 ITR 9,13,14 where it has been held as under:- "On the basis of the language used u/s 68 and the various decisions of different High Courts and the apex court, the only conclusion which could be ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has been found by the Tribunal that the income actually belongs to the assessee. Therefore, there was no impediment in levying tax on the income of the assessee irrespective of whether some other persons have already been made to submit returns in respect of the income and have been assessed on the basis of the declaration submitted by them. We are not concerned with the remedies which other persons may follow. We accordingly hold that the Tribunal was not justified in directing to delete the addition of Rs. 84,769/- and Rs. 22,127/-, from the income of the assessee firm which the Tribunal has found to be the income of assessee firm and not of the other persons named above. Accordingly, we answer the question referred to us in the nega ..... X X X X Extracts X X X X X X X X Extracts X X X X
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