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TMI Blog2018 (1) TMI 1502X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer made addition u/s. 68 of the Act. Before the CIT(A), the assessee explained that Shir Subir Khan died in the year 2009 and as such it was impossible to get the confirmation letter from him for the credits. It was submitted that the said amount was paid by Shri Subir Khan towards booking 1000 sq. ft. space in the building called "Killi Towers" under construction at that time. In support of this, the assessee filed a copy of deed of agreement dated 06.02.2007 before the lower authorities. The CIT(A) after considering the same observed that the assessee had taken two different stand and confirmed the addition. The relevant finding of the CIT(A) is reproduced below: "4.2 I considered the rival contentions bearing in mind the documents brought out by the appellant. After due consideration, I don't find any inifirmity in the decision the Assessing Officer has taken to bring to tax the alleged loan availed from Mr. Subir Khan as unexplained credit under section 68 for the following reasons, 1. The appellant has taken two different stands i.e. the one during the course of reassessment proceedings stating that it was a loan availed and another one during the cours ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such, it cannot be considered. 7. Admittedly, in our opinion, the details of repayment of loan was not filed before the lower authorities and they had no occasion to examine the details. Further, the assessee has taken two different stand , one before the CIT(A) and another before the Assessing Officer. Hence it is appropriate to remit the issue back to the file of the Assessing Officer to examine the same afresh in accordance with law. Accordingly, we remit the issue to the file of the Assessing Officer for his fresh consideration and decide the same after giving opportunity of hearing to the assessee. Thus the appeal filed by the assessee is partly allowed for statistical purposes. I.T.A. Nos. 298 & 299/Coch/2016 : Revenue's appeals 8. The only issue in these appeals is with regard to deletion of addition made by the Assessing Officer on account of unexplained capital contribution by the partners. 9. There was a search operation u/s. 132 of the I.T. Act on 11/10/2007 in the premises of M/s. Parthas Infopark Pvt.Ltd., Trivandrum and connected cases. Subsequently, there was a survey u/s. 133A of the Act on 12/12/2007 at the office of the assessee's auditor Shri S. Jeyachand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtant issue based on the records available with. The issue for consideration is whether the balance sheet and income & expenditure account found in the appellant's auditor office can be relied on and addition of Rs. 58,50,000/- on account of fresh capital infused into the capital account of some of the partners, could be made or not. Another issue for further consideration is whether the audited balance sheet and profit & loss account enclosed to the return filed in response to notice issued u/s 148 can be relied on and then based on which addition made on account of fresh capital infused in by the partners could be deleted or not. After due consideration, I am of the opinion that the balance sheet and income & expenditure account found in the appellant's auditor office cannot be relied on and no addition on account of fresh capital brought to the capital account of the partners can be made for the following reasons,: 1. The Hon'ble Delhi High Court decision relied on by the appellant do not empower the Assessing Officer to make the addition and complete the assessment based on the statement given by the third party (M.S.Sreejesh) and also the document (balance sheet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be relied upon and assessment be completed. The Assessing Officer has not done this while completing the assessment for all the four years. Hence, need be compensated at least now, 8. The return which was filed for the AY 2008-09 which in turn was filed along with the audited balance sheet and profit & loss account, has not only been accepted but also been processed u/s 143(1). This return cannot be accepted and processed without rejecting the balance sheet and profit & loss account pertains to AYs 2005-06 to 2007-08 found at the auditor's office and relied on by the Assessing Officer to complete the assessment. Having accepted the return filed for the AY 2008-09, the Assessing Officer has no other option but to accept the balance sheets and profit & loss accounts filed for previous three assessment years including the current assessment year i.e. AY 2006-07. As per the balance sheet filed for the AY 2006-07, none of the partners have introduced fresh capital to their capital account. 9. Without considering the work-in-progress as shown in the audited balance sheet filed along with the return filed in response to the notice issued u/s 148 for the AYs 2005-06 to 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hould not have been relied upon, instead rejected. 13. No opportunity was given to the appellant to rebut the statement of Mr. M.S.Sreejesh inspite of filing a letter dt.27.09.2010 explaining all the issues including the issue of capital not been brought in during the year under consideration. 4.5 In view of al the above, I am of the considered opinion that the Assessing Officer has not justified the addition of Rs. 58,50,000/- made on account of capital brought in by some of the partners and accordingly the same is deleted." 12. Similarly for the assessment year 2007-08, the CIT(A) deleted the addition. 13. Against this the Revenue is in appeal before us for both A.Ys. At the time of hearing, the Ld. DR pointed out that these assessments were made u/s. 144 of the Act. There was no co-operation by the assessee before the Assessing Officer. However, the CIT(A) deleted the addition without properly examining the balance sheets. According to the ld. DR, balance sheet was duly signed by the managing partner, Shri Mohanan Nair and it is a valid document to frame the assessment on that basis. The Assessing Officer compared the balance sheet filed by the assessee along with the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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