9911796707
TMI Blog2012 (9) TMI 216X X X X Extracts X X X X X X X X Extracts X X X X ..... 61 by placing reliance on the judgement of Gujarat High Court in the case of Rohini Builders reported in 256 ITR 350. 3. Brief facts of the issue are that Sri K.G.K. Prasad and Sri K. Seshu Prasad are the partners of the assessee firm. They introduced capital in the firm at Rs. 48,15,023 and Rs. 20,20,120, respectively. On enquiry, Sri K.G.K. Prasad explained source of investment as follows: 1) Income returned during the last six assessment year 2) Agricultural income of Rs. 16,00,000. 3) Advance received on account of sale of agricultural land - Rs. 35,00,000 4) Accumulated savings of Rs. 15,00,000 3.1 The Assessing Officer given credit of Rs. 3,63,990 out of returned income of Rs. 7,27,980. He rejected the agric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... went in appeal before the CIT(A). 3.3 The CIT(A) observed that the partners are assessed to tax and being so, while placing reliance on the judgement of Gujarat High Court in the case of Rohini Builders supra), he deleted the addition made by the Assessing Officer. Against this the Revenue is in appeal before us. 4. The learned DR strongly relied on the following judgements: a) CIT vs. Shiv Shakti Timbers, 229 ITR 505 (MP) b) CIT vs. Kishorilal Santoshilal, 216 ITR 9 (Raj) c) Dhingra Global Credence P. Ltd. 1 ITR (Trib) 529 (Del) d) DCIT v. Punjab Kirana Bhandar, 64 ITD 92 (Jab) e) Order of the Tribunal in ITA No. 1648/HYD/2010 dated 9.4.2010 in the case of Beerelli Damodar 4.1 He submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e facts of the case to introduce the capital. However, no supporting evidence has been furnished by the assessee. The availability of funds with the partners was not at all disclosed in their respective returns of income. Being so, it is not possible to come to a conclusion that the partners are having sources to introduce capital in the firm. Similar issue was considered by the Madhya Pradesh High Court in the case of CIT vs. Shiva Sakti Timbers (229 ITR 505) wherein the High Court held that as there is a credit entry in the books of account of the assessee and there is no satisfactory explanation, then it will be deemed to be income of the firm. 7. Further, in this connection, reference may be made to the decision of the Allahabad High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owned that the sums had been advanced by them as capital outlay for the formation of the firm, they entered them as cash credits in the relevant previous year. The Tribunal arrived at its finding on the basis of surmises that the explanation of the assessee might be true. It was for the partners of the firm to explain to the satisfaction of the Income-tax Officer with regard to the nature and source of the cash credit entries in the books of the firm of the previous year and, on the Tribunal's own finding, the onus had not been discharged. Therefore, the Tribunal was not right in deleting the addition of Rs. 16,700 from the assessment of the firm." 9. A similar view was taken by this court also in the case of Banshidher Agarwal Parma v. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to prove the identity, capacity and genuineness is on the firm ; (iii) if the cash credit is not satisfactorily explained, the Income-tax Officer is justified to treat it as income from undisclosed sources ; (iv) the firm has to establish that the amount was actually given by the lender ; (v) the genuineness and regularity in the maintenance of accounts has to be taken into consideration by the taxing authorities, and (vi) if the explanation is not supported by any documentary or other evidence, then the deeming fiction created by Section 68 of the Income-tax Act, 1961, can be invoked." 12. Therefore, from the series of decisions of various High Courts, it is well established that in such a situation where there is a credit entry in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
