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TMI Blog2012 (12) TMI 566X X X X Extracts X X X X X X X X Extracts X X X X ..... he department had accepted the income as business income and, therefore, the doctrine of consistency is also in favour of the assessee. Appeal decides in favour of assessee Addition on account of cash deposit in bank u/s 68 – Assessee contended that cash deposit being money deposit by partner towards capital – AO’s ground was that there is time gap between cash withdrawal from partners bank account and deposit in assessee account – Held that:- As the introducing partner is doing his own business also and is regularly assessed to tax and cash withdrawals as well as introduction of cash in the firm are reflected in his accounts about which no dispute has been raised. Therefore, merely on the ground that there was time lag between the cash wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erby" which in terms of the said agreement had been handed over to Mr. Jawahar S. Pariyani for management and control of the hotel on payment of royalty which for the relevant year was Rs.5.00 lacs per annum. In the assessment order, the AO held that the royalty was nothing but payment received by the assessee on letting out of the hotel premises. He, therefore, treated royalty income as income from other sources under section 57 of the Income tax Act as the hotel building premises had been let out along with furniture and equipments. The AO allowed expenses against the said income at Rs.1,66,666/- on estimate and balance amount of Rs.3,33,334/- was treated as income from other sources. 2.1 The assessee disputed the decision of AO and subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el as per conducting agreement dated 2.4.1998 on payment of royalty of Rs.5.00 lacs per year. The issue is whether the royalty income has to be considered as business income as declared by the assessee or as income from other sources as assessed by AO. In our view, the income has arisen to the assessee from running of the hotel of which the assessee was owner. Instead of running the hotel itself, the assessee had given the management and control of the hotel to Mr. Jawahar S. Pariyani. We agree with CIT(A) that it is a case of commercial exploitation of the assets owned by the assessee. Moreover, we also note that both in the earlier years and subsequent years the department had accepted the income as business income and, therefore, the doc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the purpose of depositing the cash. Therefore, there was no nexus between cash deposit ad withdrawals. The AO did not accept the source of cash and made an addition of Rs.3,27,500/- under section 68 of the Act. The assessee disputed the decision of AO and submitted before CIT(A) that Shri Amit Achhra had introduced a sum of Rs.3,27,500/- towards his capital in the firm out of cash balance available with him. Shri Amit Achhra was carrying on transport business in his personal capacity and was maintaining regularly books of account and was assessed to tax. Capital introduced had been declared by him. CIT(A) on perusal of records observed that the cash withdrawal and cash deposits were regularly recorded in the books of account. The availabi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, merely on the ground that there was time lag between the cash withdrawals and the deposits, addition cannot be justified as there is no legal bar on a person keeping money in cash. There is also no material placed on record to show that the cash withdrawals by Shri Amit Achhra had been used for some other purpose and were not available for cash deposits in the bank account of the firm. We, therefore, see no infirmity in the order of CIT(A) in deleting the addition made by AO and the same is, therefore, upheld. 6. The third dispute is regarding addition of Rs.13,96,200/- being cash deposit in the current A/c. No.CA/01/800132 in the name of "Hotel Derby" with Corporation Bank, Ulhasnagar Branch. The AO noted that the said account was op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pital account, as well as balance sheet and P&L account of hotel Derby along with statement of account No.CA/01/800132 with corporation Bank. The bank account was duly reflected in the balance sheet of hotel Derby. Shri Pariyani had not disputed the ownership of the said account. CIT(A), therefore, deleted the addition made by AO. Aggrieved by the said decision revenue is in appeal before the Tribunal. 6.2 Before us, the ld. AR for the assessee reiterated the submissions made before the lower authorities that Shri Jawahar S. Pariyani was owner of the account for running hotel Derby. The partner of the firm was only authorized signatory to safeguard the interest of the firm. Accounts had been disclosed in the books of Shri Jawahar S. Pariya ..... X X X X Extracts X X X X X X X X Extracts X X X X
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