TMI Blog2024 (3) TMI 420X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee-firm during the year, the issue stands covered by the decision of Pankaj Dyestuff Industries [ 2005 (7) TMI 601 - GUJARAT HIGH COURT] wherein held that addition, if any, in such circumstances ought to have been made in the hands of the partners alone who had owned up the money introduced as capital as belonging to them but failed to prove their creditworthiness. Even otherwise we find that the returns filed by these partners prove their creditworthiness since the income though returned as agricultural income was not accepted by the department in toto but the portion not accepted was treated as income from other sources of these partners. Thus the quantum of income returned by these partners was accepted by the Revenue albeit under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the Act is bad in law. 3. No specific arguments with respect to the aforestated ground was made, hence, the same is dismissed. 4. Ground No. 2 reads as under: The ld.AO has erred in law as well as on facts in making the addition of Rs. 1,20,00,000/- on account of introduction of fresh capital by the partners and the ld.CIT(A) has also erred in law as well as on facts in confirming the same. 5. The challenge in the above ground is to the addition made to the income of the assessee, which was confirmed by the ld.CIT(A) of Rs. 1,20,00,000/- on account of treating the capital introduced by the partners of the assessee-firm as unexplained cash credit in terms of section 68 of the Act. 6. Assessee is engaged in the business of civil construc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he year iv) Agriculture income and expenditure for the year; v) Agriculture land holding proof. 8. The Ld.CIT(A) sought a remand report from the AO on the same, who stated that no evidence of earning of agriculture income was filed by the assessee, and further he noted disparity in agriculture income earned by various partners on the same land holdings. The finding of the AO at page no.13 of the order is as under: From the above it is noticed that the Smt. Jamnaben M Sorathia and Smt. Jayshree R Sorathia are holding the same agriculture land and earning Agricultural Income of Rs. 24,78,910/- and Rs. 37,23,570/- respectively. Further, Shri Naranbhai Do Sorathia and Rameshbhai N Sorathia are holding same land along with three others and earni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er contended that the identity of the partners are not doubted and partners have confirmed to have introduced capital in the firm, and that the addition, if any, on account of credit-worthiness of the partners not being proven, could have been made only in the hands of the partners and not the assessee firm. He pointed out that the Hon ble Gujarat High Court held so in the case of CIT Vs. Pankaj Dyestuff Industries, in Income Tax Reference No.241 of 1993 dated 6.7.2005. Copy of the order was placed before us, and the ld.counsel for the assessee drew our attention to the relevant finding of the Hon ble High Court on this issue at para 13 to 15 of the judgment as under: 13. Applying the aforesaid principles to the facts of the present case, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by offering explanation, which has not been found to be incorrect or false in any manner. The interest of the revenue is also safeguarded as the Income Tax Officer has been given the liberty to consider the said credits in the hands of the partners if he is not satisfied with the sources of investment of cash credits in the accounts of the partners. 15. In these circumstances, it is not possible to find that the order of the Tribunal suffers from any infirmity which would require interference at the hands of this Court. Accordingly, it is held that the Tribunal was right in law and on facts in deleting the addition of Rs. 87,250/- being deposits in the accounts of the partners. The question referred to this Court is, accordingly, answered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e year, the issue stands covered by the decision of the Hon ble jurisdictional High Court in the case of Pankaj Dyestuff Industries (supra) wherein in the backdrop of identical facts and circumstances, the Hon ble High Court held that addition, if any, in such circumstances ought to have been made in the hands of the partners alone who had owned up the money introduced as capital as belonging to them but failed to prove their creditworthiness. Even otherwise we find that the returns filed by these partners prove their creditworthiness since the income though returned as agricultural income was not accepted by the department in toto but the portion not accepted was treated as income from other sources of these partners. Thus the quantum of i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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