1999 (9) TMI 21

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..... short, "the Act"), at the instance of the Revenue and the following question of law has been referred for answer by this court : "Whether the Income-tax Appellate Tribunal was justified in holding that when there is credit in the capital account of the partner in the books of the firm, the addition therefor cannot be made in the case of the firm under section 68 of the Income-tax Act, but the sam .....

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..... ner of Income-tax (Appeals) deleted these three entries and held that the firm has satisfactorily accounted for the aforesaid three entries. The matter was taken up in appeal by the Revenue before the Tribunal. It may be clarified that we are not concerned with Shri S. K. Gupta, because the question has not been referred qua Shri S. K. Gupta. The Tribunal also affirmed the finding of the Commissio .....

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..... e books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Income-tax Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year. Therefore, according to section 68, the first burden is on the asses .....

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..... e business. The explanation given by the assessee was found to be satisfactory and he deleted the aforesaid three entries. The same finding of fact has been affirmed by the Tribunal. Once it is established that the amount has been invested by a particular person, be he a partner or an individual, then the responsibility of the assessee-firm is over. The assessee-firm cannot ask that person who mak .....

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..... hen the burden of the firm is discharged and in that case that credit entry cannot be treated to be the income of the firm for the purposes of income-tax. It is open to the Assessing Officer to take appropriate action under section 69 of the Act, against the person who has not been able to explain the investment. In the present case, there is the concurrent finding of both the Commissioner of Inco .....

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