TMI Blog2019 (3) TMI 1598X X X X Extracts X X X X X X X X Extracts X X X X ..... e with evidence to the satisfaction of the AO regarding the identity and credit worthiness of the loan creditor and genuineness of the transaction. Appropriate to restore the issue to the file of the AO with a direction to grant one final opportunity to the assessee to substantiate with evidence to his satisfaction regarding the fulfillment of the above three conditions in terms of the provisions of section 68 - Appeal filed by the assessee is allowed for statistical purposes. - ITA No. 3734/Del/2018 - - - Dated:- 29-3-2019 - SHRI R.K. PANDA, ACCOUNTANT MEMBER For the Appellant : Shri K. Sampath, Advocate Shri V. Rajakumar, Advocate For the Respondent : Ms Rakhi Vimal, Sr.DR ORDER This appeal by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. The ld. counsel for the assessee submitted that the capital introduced by any of the partners has to be taxed in the hands of the partner and not in the hands of the firm. Referring to the decision of the Hon'ble Allahabad High Court in the case of India Rice Mills vs. CIT reported in 218 ITR 508, he submitted that the Hon'ble High Court in the said decision has held that it was for the partners to explain the source of the deposits and if they fail to discharge the onus, then, such deposits could be added in the hands of the partners only. He submitted that various Benches of the Tribunal are also taking this consistent view that addition, if any, can be made in the hands of the partners only and not in the hands of the firm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hs made by Shri Sunny Bansal is not fully explained since his credit worthiness was not proved. Further, no copy of return of income for assessment year 2006-07 was filed. It is the submission of the ld. counsel for the assessee that addition, if any, could have been made in the hands of the partners and not in the hands of the firm. I find merit in the above arguments made by the ld. Counsel. It has been held in various decisions that when any partner invests or contributes in capital to the partnership firm, it is the partner who has to explain the source of such contribution and addition, if any, can be made in the hands of the partner only u/s 68 or 69 of the IT Act and no addition can be made in the hands of the firm. I find the Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... five creditors, namely, M/s Hisar Distributors, Sh. Hari Singh Poonia, Shri Narender, Shri Ravi and Smt. Sneha. Since the assessee failed to prove the genuineness of the loans, the Assessing Officer, invoking the provisions of section 68 of the Act, made an addition of ₹ 27,25,000/- to the total income of the assessee. In appeal, the ld.CIT(A) deleted the addition in respect of loan obtained from M/s Hisar Distributors and Shri Ravi amounting to ₹ 8,75,000/-. He, however, sustained the addition in respect of the remaining three loan creditors as mentioned above. 10. Aggrieved with such order of the CIT(A), the assessee is in appeal. 11. I have considered the rival arguments made by both the sides and perused the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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