TMI Blog2023 (10) TMI 376X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 84,000/- as sustained by ld. CIT(A). The assessee succeeds on this issue. We order accordingly. Additions to Partner s Capital account - additions sustained by ld. CIT(A) were towards goodwill earned from Den Digital which stood credited to the capital accounts of the partners for which no taxes were paid - The amount is credited in the books of the assessee, and the onus is on the assessee to substantiate that the said amount has suffered taxation, which assessee fails to prove and bring on record cogent evidences to substantiate that said amount has already suffered taxation. Thus, we don t find any infirmity in the well-reasoned appellate order passed by ld. CIT(A) confirming additions which we sustain. The assessee fails on this issue. We order accordingly. Remaining amount of additions as sustained by CIT(A), it is observed that the cash stood credited in the Partners Current Account namely Mr. Kamlesh Patel and Mr. Manojbhai Patel respectively, for which the assessee could not explain sources of cash credits in the Partners Current Account. Thus, it is a case of cash being received by the assessee ostensibly from Partners, for which no cogent explanation was forthc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear. Following the direction, the Assessing Officer after verification of records and calling explanation from the assessee made an addition on account of salary paid by cash of Rs. 1,84,000/-. Regarding Partners Capital account, the assessee could explain Rs. 16,73,997/- and source thereon, thereby the Assessing Officer made an addition on the remaining addition Rs. 55,55,765/- where the source is not explained. 3. Aggrieved against this order, the assessee field an appeal before Ld. CIT(A). The Ld. CIT(A) deleted the addition of Rs. 1,00,000/- on account of Salary expenses, however retained balance Rs. 84,000/- as not properly explained. Similarly Partner s Capital account, Ld. CIT(A) deleted Rs. 12,04,000/- wherein the source was explained and retained balance addition of Rs. 43,51,765/- observing as follows: 3.3.1 During the appellate proceedings, the appellant had filed written submission and documents in support of its claim. It main contention was that the expenses are supported by vouchers and verifiable form the salary register maintained by the appellant and also the fact that the total salary paid to all the employees is hardly Rs. 28,600/- per month. On verifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the remaining partners details, it has been stated that since the other partners are no longer in business with the existing partners and are not having good and cordial relations with them it is not possible to obtain copies of their ITR. From the foregoing discussion it is clear that the appellant had failed to prove the introduction of capital with supporting documents in respect of Rs. 14,26,003/- Thus, the addition to the extent of Rs. 14,26,003/- is upheld and the appellant fails on this issue. 4.3.2 So far as Rs. 41,29,765/-being introduction of fund in current account by Shri Kamlesh Patel and Shri Manojbhai Patel, the appellant had filed respective ledger accounts, bank statement of The Baroda City Cooperative Bank Ltd., cash book, etc. The addition in respect of Shri Kamleshbhai Patel is of Rs. 25,59,500 The bank statement, ledger etc. filed in support of this claim has been verified. On the basis of verification of the documents filed, source of capital to the extent of Rs 9,14,000 is verifiable from the bank statement as the same has been transferred from Shri Kamleshbhai Patel's bank account no. 2249 with The Baroda City Coop Bank Lal, the details of such en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd he made out a Demand Draft in favour of Star India Ltd. for Rs. 2,00,000 and ESPN Software Pvt. Ltd. for Rs. 13,59,765/- which were payable by the Firm. The said amount through oversight were recorded in his current account instead of reducing the sundry debtors account by that amount. In support relevant ledgers were filed. This claim, that is mistake by oversight is not tenable as the appellant's accounts are audited by the Chartered Accountant and if the sundry debtors are reduced this should have the bearing in its books of account automatically and the mistake should have been pointed out by the Auditors at the auditing stage itself. Thus, this claim is nothing but an after-thought to cover up the issue. Regarding the alleged payment made by Shri Manoj Patel in favour of Star India Ltd. for Rs. 2,00,000 and ESPN Software Pvt. Ltd. for Rs. 13,59,765/- which were payable by the Firm, the appellant had not filed any supporting documents to establish the said transaction. On verification of ledger of sundry debtor collection account it is noted that all the transactions are in cash, thus it is not fully verifiable. Thus, considering the facts and circumstances of the case a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e no option to decide the appeal exparte, with available materials on record. 5.1. It is an admitted case of the assessee, the original assessment order for the Assessment Year 2009-10 was revised u/s. 263 on account of Salary expenses made through cash and addition on account of Partner s Capital account were not explained properly. As against the giving effect order, assessee challenged the same before Ld. CIT(A) who deleted Rs. 1,00,000/- amount of Salary expenses and Rs. 12,04,000/- amount of Partner s Capital account thereby sustained the addition of Rs. 84,000/- on account of Salary expenses and Rs. 43,51,765/- on account of Partner s Capital account. 6. We have observed that the assessee has not filed complete details before the Lower Authorities. We also find from the order of Ld. CIT(A) that the assessee filed written submissions and documents in support of its claim with respect to Salary Expenses. The assessee claimed before ld. CIT(A) that the salary expenses are supported by vouchers and verifiable from the salary register maintained by the assessee and that the salary paid to the employees is merely Rs. 28,600/- per month . The ld. CIT(A) after verifying the vou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the Partners Current Account namely Mr. Kamlesh Patel and Mr. Manojbhai Patel respectively, for which the assessee could not explain sources of cash credits in the Partners Current Account. Thus, it is a case of cash being received by the assessee ostensibly from Partners, for which no cogent explanation was forthcoming from the assessee to substantiate the sources of cash and the amount stood credited in the books of accounts of the assessee. Thus, the onus is squarely on the assessee to prove and substantiate with cogent evidences as to sources of the cash receipts as well as to satisfy the mandate of Section 68 to the satisfaction of the authorities, which does not stood satisfied as the assessee failed to substantiate. Before us, the assessee did not appear and based on material on record, we have no hesitation in upholding this addition as was sustained by Ld. CIT(A) as we do not find any infirmity in the well-reasoned appellate order passed by Ld. CIT(A), which we sustain. The assessee fails on this issue. We order accordingly. 7. In the result, the appeal filed by the Assessee is partly allowed as indicated above. Order pronounced in the open court on 06 -10-2023 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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