TMI Blog2020 (10) TMI 786X X X X Extracts X X X X X X X X Extracts X X X X ..... he firm which has to be debited to the assessee s spouse s capital account in the firm s books of account. Just because the books of accounts of the assessee s firm and the assessee s spouse has not been properly maintained or incomplete the nature of the transaction does not change. Amount advanced by M/s. KSR Constructions to the assessee has to be construed as the amount given by M/s. KSR Constructions on behalf of the assessee s spouse. Hence, the first proviso of section 56(2)(vi) shall come into operation in the case of the assessee and accordingly the amount received by the assessee shall be treated as a gift received by the assessee from her spouse. Direct the Ld. AO to delete the addition made in the hands of the assessee inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k District on 19/04/2008. To verify the source of the investment the case of the assessee was reopened and notice u/s. 147 was issued. However, the assessee failed to co-operate before the Ld. AO by providing evidence to explain the sources of investment made by her for ₹ 12,50,000/-. Therefore, the Ld. AO added the amount of ₹ 12,50,000/- as unexplained investments in the hands of the assessee invoking the provisions of section 69 of the Act. 4. When the matter cropped up before the Ld. CIT (A), the assessee furnished additional evidence in form of confirmation letter issued by the spouse of the assessee Sri K. Kondal Rao stating that the investment of ₹ 12,50,000/- was made from the funds gifted by him. Sri K. Kondal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds utilised by the assessee for the purchase of property for ₹ 12,50,000/- (10,00,000 + 2,50,000) was from the funds received from the partnership firm viz., M/s. KSR Constructions wherein the assessee spouse is one of the partners. The Ld. CIT (A) also observed that the partnership firm had not maintained regular books of accounts and the aforesaid transaction was not reflected in the income tax return filed by the firm. He further observed that the assessee s spouse had also not disclosed the transaction in her return of income. Therefore, the Ld. CIT (A) opined that since the assessee has received ₹ 12,50,000/- from the assessee s partnership firm M/s. KSR Constructions wherein the assessee s spouse is a partner it cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rce of the fund invested by the assessee has flowed from the partnership firm M/s. KSR Constructions wherein the assessee s spouse is a partner. Further, it is not in dispute that the assessee does not have any proximity with M/s. KSR Constructions other than the fact that her spouse is one of the partners in the firm. Further there are also no other reasons for the firm M/s. KSR Constructions to advance money to the assessee other than by the direction of the assessee s spouse who is one of the partners of the firm. It is obvious that M/s.KSR Constructions would not have advanced the amount of ₹ 12,50,000/- to the assessee but for the advice of the spouse of the assessee. Therefore, the amount advanced by M/s. KSR Constructions to th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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