2014 (2) TMI 130

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..... ooks of the assessee firm in the name of its partner u/s.68 of the Act cannot be made application in the case of the assessee firm ? (ii) Whether in the facts and circumstances of the case and in law, the Appellate Tribunal is justified in coming to the conclusion that there is no law that any unexplained cash credit appearing in the books of the firm in the name of its partners must necessarily be assessed in the hands of the firm itself or in the hands of the partners alone ? (iii) Whether in the facts and circumstances of the case and in law in holding that the assessee firm has discharged its onus u/s.68 of the Act ?" 2. Though three questions are framed, in essence the issue is common, namely, the additions made by the Assessing Off .....

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..... er not the case of the AO that the impugned investment has not been recorded in the books to make the investments. Under section 69, investments, which are not recorded by the assessee in his books, can be considered nor addition if the assessee is unable to satisfactorily explain the nature and source of investment. Thus section 69 covers only those investments which are not recorded in the books. Similarly, amount of investments, etc. not fully disclosed in books of account can be considered for addition u/s. 69B if the assessee is unable to satisfactorily explain the nature and source of investments declared if, the books cannot be treated as unexplained unless a finding is recorded that investments have either not been fully declared in .....

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..... which would discharge the onus which lay on the assessee. It is not the case of the revenue that the partners of the assessee firm are fictitious. The Income Tax Officer has not disputed that the credits in the accounts of the partners were not deposits from the partners. Moreover, it is an admitted position that this was the second year of the firm, and that it was running in loss. It is true that the Income Tax Office did not accept the explanation given on behalf of the assessee in respect of the new deposits or cash credits in the accounts of the partners. The mere nonacceptance of that explanation does not, however, provide material for finding that the said sum represented income of the assessee firm. As held by the Allahabad High Co .....

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