TMI Blog2017 (12) TMI 133X X X X Extracts X X X X X X X X Extracts X X X X ..... genuine. - Decided in favour of assessee. - Income Tax Appeal No. 9 of 2015, Income Tax Appeal No. 349 -350 of 2016 - - - Dated:- 28-11-2017 - Hon. Bharati Sapru And Hon. Saumitra Dayal Singh, JJ. For the Appellant : S.S.C. I.T.,Praveen Kumar For the Respondent : Amit Mahajan,Rishi Raj Kapoor ORDER Heard Sri Praveen Kumar, learned counsel for the revenue and Sri R.R. Agarwal, Senior Advocate assisted by Sri Amit Mahajan, learned counsel for the assessee. Since the facts and the issue involved in all these three appeals is identical, all the appeals are being heard together and disposed of by a common order which is being passed in Income Tax Appeal No.9 of 2015, treating as a leading case. This appeal under Section 260A of the Income Tax Act, (hereinafter referred to as the 'Act') has been filed by the department against the order of the Income Tax Appellate Tribunal, Lucknow Bench, Lucknow dated 21.08.2014 for the assessment year 2001-02. The appeal has been admitted on the following questions of law:- 1. Whether members of AOP have distinct identity vis-a-vis as its constituent firm as in the case of partners firm u/s 184. 2. Whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fact of their having made the deposit with the assessee. However, the Assessing Officer proceeded to again rejected the claim of cash credit entries standing in the books of accounts of the assessee and added the same to its income. The assessee again carried out the matter in appeal to the CIT (Appeals), who vide its order dated 21.08.2009 allowed the appeals of the assessee. According to the CIT(Appeals), the identity of the persons making the deposit was not in doubt inasmuch as those persons were the very same persons who constituted the AOP/assessee. As to the genuineness of the transactions, the CIT (Appeals) found that the assessee had filed affidavits/confirmation of all its constituents who had made contribution to the capital which was found existing by way of cash credit entries. The CIT (Appeals) also noted that the revenue had got conducted third party inquiry and no adverse report or inference had been brought on record either by the Assessing Officer or in any other manner in respect of subject matter of those inquiries. The CIT (Appeals) further noted that there was no evidence to disbelieve the documentary evidence in the shape of income tax return and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tually belong to the partners and as such the ration of decision of Hon'ble High Court, Allahabad in the case of CIT Vs. Kapoor Bros. reported in 118 ITR 741 and the decision of the Hon'ble Patna High court reported in 142 ITR 133. Then in paragraph 4 of the order, the Tribunal noted that the revenue supported the assessment order on the strength of two judgments; one of this Court in the case of Commissioner of Income Tax Vs. Kapur Bros. [1979] 118 ITR 74(All) and also on a decision of Hon'ble Patna High Court rendered in the case of Commissioner of Income Tax Vs. Anupam Udyog reported in [1983] 142 ITR 133(Pat.). No other argument had been noted by the Tribunal as having been made by the revenue in the appeal before the Tribunal and there is no dispute raised in the present appeal in that regard. In the aforesaid factual background, learned counsel for the revenue submits that the assessee had failed to establish the genuineness of the transactions as also the creditworthiness of the depositors inasmuch as the assessee never produced the liquor contract entered into with the Government of U.P. He therefore submits that the contract would have revealed whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent unaccounted or undisclosed income of the assessee as no business had been conducted till that date and no income could have, therefore, arisen to the assessee. This distinguishing features has been considered in the subsequent judgment of this Court wherein Kapur Bros. case was distinguished on that count. Reliance in this regard has been placed on two judgments of this Court in the case of Abhyudaya Pharmaceuticals Vs CIT reported in 350 ITR 358 (All.) and India Rice Mills Vs. CIT reported in 218 ITR 508 (All.). Having considered the arguments so advanced by learned counsel for the parties, we find, in the case of Abhyudaya Pharmaceuticals (supra), this Court considered the decision in the case of CIT Vs. Jaiswal Motor Finance [1983] 141 ITR 706 (All) as also the Kapur Brothers.(supra) and thereafter concluded that the authorities below had committed an error as they failed to take into account the fact that it being the first year of business, no addition could have been made to the undisclosed income of the assessee, that was a partnership firm. Similarly, in the case of India Rice (supra) also, this Court has held that the Tribunal had fallen into a serious error i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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