TMI Blog2011 (7) TMI 1359X X X X Extracts X X X X X X X X Extracts X X X X ..... ntial and commercial properties and the main activity of the assessee is to procure land, to develop and construct residential or commercial flat/shops. For the assessment year under appeal, it filed the return of income on 29.12.2006 declaring the total loss at ₹ 9,33,845/-. The AO framed the assessment under section 143(3) on 26.12.2008 at a total income of ₹ 49,33,155/-. In the assessment order, the AO made addition amounting to ₹ 6,53,000/- for unexplained credit in capital account of the partners and another addition of ₹ 52,14,000/- on account of unexplained deposits from 14 parties. In respect of first addition, the AO observed that the assessee was asked to prove the creditworthiness and genuineness of the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the order of the ld. CIT(A), the assessee is in appeal against the confirmation of addition of ₹ 52,14,000/- under section 68 of the I.T. Act in respect of advance deposits. The only ground raised by the Revenue in its appeal is against deletion of ₹ 6,53,000/- made by the AO on account of unexplained credit under section 68 of the I.T.act. 4. At the time of hearing, Shri Pritesh Shah, A.R. appeared on behalf of the Assessee and pointed out that the assessee is a firm consisting of 10 partners. In the assessment year under appeal, various parties booked the flat. Out of 88 parties, the assessee firm was having the dispute with 14 parties. This dispute reached among the partners of the firm. There was a division o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... troversy involved in this Revenue s appeal is covered in favour of the assessee by the decision of the Hon ble Allahabad High Court in teh case of India Rice Mills vs- CIT reported in 218 ITR 508 (ALL) wherein it was held that in respect of capital contribution made by the partners, it was for the partners to explain the source of deposits. This unexplained deposit, in no case, could be the income of the assessee firm. He accordingly, pointed out that the view taken by the ld. CIT(A) in deleting the addition of ₹ 6,53,000/- be upheld. 5. On the other hand, Shri S.K.Meena, appeared for the Revenue and pointed out that enough opportunity was allowed by the AO to explain the deposit of 14 parties. Since this was not done, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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