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TMI Blog2018 (1) TMI 1502X X X X Extracts X X X X X X X X Extracts X X X X ..... ecide the same after giving opportunity of hearing to the assessee. Thus the appeal filed by the assessee is partly allowed for statistical purposes. Unexplained capital contribution by the partners - addition u/s 68 - search operation u/s. 132 - survey u/s. 133A at the office of the assessee s auditor - CIT(A) deleted the same by observing that the balance sheet and income and expenditure filed subsequent to the survey cannot be relied upon and no addition could be made on account of capital contribution brought in by the partners - HELD THAT:- The balance sheet filed subsequent to the survey needs to be verified which has not been verified either by the Assessing Officer or by the CIT(A). Hence, in the interest of justice, we remit the disputed issue to the file of the Assessing Officer for fresh consideration and decide the issue in accordance with law after giving reasonable opportunity of hearing to the assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... ut through a banking channel and by a cheque. 5. No acceptable evidence was forthcoming from M/s. Ahmed Khan and Company where in Mr. Subir Khan was allegedly a partner, as the source was met out from his earnings from the firm as pleaded during the course of appeal proceedings. 6. Both the deed of agreement and confirmation letter are not verifiable as Mr. Subir Khan is no more and died in August, 2009 itself. 7. The decision of Hon'ble Delhi High Court in the case of CIT vs. Concorde Capital Management Company Limited (334 ITR 346) relied on by the appellant is totally misquoted since no addition was made based on third party statement but on the balance sheet signed by the managing partner. 4.3 In view of the above mentioned reasons, the addition made on account of unexplained credit is hereby confirmed and appeal on this ground is therefore dismissed." 4. Against the decision of the CIT(A), the assessee has filed this appeal before us. The Ld. DR relied on the orders of the lower authorities. 5. Before us, it was submitted that the amount of ₹ 10 lakhs was repaid by the assessee to Smt. Nabeesa Khan, wife of Shri Subir Khan, vide Cheque No. 005434 dated 28 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re accounts, produced subsequently by the managing partner of the assessee-firm, the assessments for the AYs 2005-06 to 2007-08 had been re-opened. With reference to the capital account, there were additions made by the partners. For the assessment year 2006-07, there was a difference between the balance sheet filed subsequent to the survey and the balance sheet filed by the assessee alongwith the return of income. As per the balance sheet filed by the managing partner subsequent to the survey for the assessment year ending 31.03.2006, details of additions to the capital account in the partner's accounts are as follows: Name of the partner Addition during the year S Mohanan Nair ₹ 11,90,000/- Annammal ₹ 11,90,000/- L Robinson ₹ 11,90,000/- Das(S A M Thamseem) ₹ 11,40,000/- Satheendran ₹ 11,40,000/- Total ₹ 58,50,000/- 10. Similarly as per the balance sheet for the assessment year ending 31.03.2007, the details of additions to the capital account in the partner's account are as follows: Name of the partner Addition during the year S Mohanan Nair ₹ 17,00,000/- Annammal ₹ 3,10,000/- L Robinson ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years i.e. AY 2005-06 to 2008-09. 4. The statement of Mr.M.S.Sreejesh who worked in the auditor's office cannot be relied on as the auditor himself vide letter dt.19.01.2015 has contended that he was not a competent person to prepare, statement of accounts and it was prepared without consulting Mr. S. Mohanan Nair, the managing partner of the appellant firm. 5. In the letter dt.27.09.2010, filed before passing the assessment order, the appellant has made out very clearly that there was a total capital of ₹ 1,40,000/- contributed by the partners and nothing more was brought in by them. 6. The Assessing Officer for the AY 2005-06 should not-have relied on two different balance sheet, one to make addition of ₹ 47,500/- for the fresh capital brought in by the partners and another one for the addition of ₹ 15,00,000/- towards unexplained credits u/s 68 against the loan given by Mr. Subir Khan. This first addition was made based on the balance sheet found at the auditor's office and the second one was based on the audited balance sheet filed along with the return which was filed in response to the notice issued u/s 148. 7. Similarly, assessment for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income & expenditure account found at the auditor's office is different from the work in progress shown in the audited balance sheet and profit & loss account filed subsequent to issuing notice u/s 148. Having accepted the return filed for the AY 2008-09, the Assessing Officer should not have considered the work in progress as on 31.03.2006 of ₹ 40,24,280/- instead, should have considered ₹ 21,35,506/- shown in the audited balance sheet. 11. All the liabilities except the alleged loan borrowed from Mr. Subir Khan, shown in the audited balance sheet for all the four years are duly supported by necessary documents. Particularly, bank loans both from Kerala State Cooperative Bank and State Bank of Travancore and also the amount advanced by Mr.S. Mohanan Nair are duly supported by confirmation letters and Income Tax returns filed for the respective assessment year. 12. The commission income of Rs,65,85,000/- shown in the income & expenditure account for the AY 2007-08 indicates that the balance sheet and income & expenditure account found at the auditor's office are meant only for showing to the bank as the firm is earning some income1 based on which loan can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of addition amounting to ₹ 10.20 lakhs which is outstanding in the name of Shri Subir Khan was made by CIT(A) without giving opportunity of hearing to the assessee and it is to be deleted. 16. We have heard the rival submissions and perused the material on record. In our opinion, the balance sheet filed subsequent to the survey needs to be verified which has not been verified either by the Assessing Officer or by the CIT(A). Hence, in the interest of justice, we remit the disputed issue to the file of the Assessing Officer for fresh consideration and decide the issue in accordance with law after giving reasonable opportunity of hearing to the assessee. Since we have remitted the issue raised in the Revenue's appeals to the file of the Assessing Officer for re-examination, the issue raised in the Cross Objection filed by the assessee is also remitted to the file of the Assessing Officer for his fresh consideration and in accordance with law. Hence the Cross Objection filed by the assessee is partly allowed for statistical purposes. 17. In the result, the appeals filed by the Revenue, the appeal filed by the assessee and the Cross Objection filed by the assessee are partl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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