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TMI Blog2025 (5) TMI 273X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessment Year (AY) 2015-16, whereby the CIT(A) upheld the addition of Rs. 2,78,14,620/- made by the Assessing Officer [hereinafter referred to as "AO"] under section 69 of the Act as unexplained investment. Facts of the Case: 2. The assessee filed his return of income for A.Y. 2015-16 declaring total income of Rs. 10,30,160/-. Based on information received during the assessment of M/s. Rudraksh Securities, a partnership firm, the AO noted that the assessee had introduced capital of Rs. 2,78,14,620/- in the firm during the relevant previous year. This capital introduction was not disclosed in his return of income nor reflected in Schedule IF. Pursuant to this, the AO issued notice under section 148A(b) of the Act and after considerin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat it was implausible for such a firm to have no bank account of its own and to carry out its transactions through a joint savings account held by two individual partners. It was further noted that the bank account of the firm (A/c No. 383010200001304) with Axis Bank was disclosed in its return. Thus, the CIT(A) concluded that the capital contribution made through a joint savings account was not proven to be genuine or belonging to the firm. 4. Aggrieved by the order of CIT(A) the assessee is in appeal before us with following grounds of appeal: 1. The Ld. CIT(A) erred in law and on facts in upholding the addition u/s. 69 of the Act, amounting to Rs. 2,78,14,620/-, as an unexplained investment, without appreciating the detailed submissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... firms to hold DEMAT accounts in their own names. It was further submitted that the bank account with Axis Bank (A/c No. 912010061282563), though held in the joint names of two partners, was used exclusively for the firm's transactions. This account and the related capital introduction were consistently reflected in the audited books of M/s. Rudraksh Securities for A.Ys. 2013-14 to 2015-16. Audited financial statements were placed on record. Confirmations from the creditors and proof of source of unsecured loans were also filed. The AR submitted that the firm's assessment for A.Y. 2015-16 had been completed and no adverse finding was recorded by the AO in respect of the capital introduced or the use of the said bank account. 6. The Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere accepted and disclosed in the audited financials. 7.3. Further, the firm's audited accounts for three consecutive years reflect the said bank account as belonging to the firm. There is no material on record brought by the AO to rebut this treatment or to establish that the said funds were used for personal purposes of the individual account holders. The identity and creditworthiness of the creditors, and genuineness of the transactions, remain unchallenged by the Revenue. 7.4. Thus, the fact that the firm used the partner's bank account as a conduit for receiving capital does not, in our view, vitiate the nature of the transaction. The law recognizes the distinction between legal and beneficial ownership, particularly in the context o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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