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TMI Blog2023 (7) TMI 497X X X X Extracts X X X X X X X X Extracts X X X X ..... ax, Circle-,Jammu, [in brevity 'the AO'] order passed u/s 143(3) of the Act. 2. The assessee has filed the appeal with the delay of 122 days. The assessee filed the petition for condonation of delay and explained that one of the partners who is dealing the legal matter was busy in medical emergency of his wife. The wife of the partner was cancer patient. The requisite the medical documents are before the bench. The ld. DR has not made any objection for condonation of delay. Accordingly the delay for 122 days is condoned and appeal is taken for adjudication. 3. The assessee has taken the following grounds: - "1. That the Worthy Commissioner of Income Tax (Appeals)- Ludhiana and Deputy Commissioner of Income Tax Circle I Jammu have erred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kept in record. The ld. AR argued that the identity of partners has no question. The source of investment of partners should be investigated in the hands of the partners not in the hands of assessee-firm. 5.1. The ld AR respectfully relied on the catena of judgments which are as follows: - 5.1.1. Commissioner of Income-taxv.M. Venkateswara Rao, [2015] 57 taxmann.com 373 (AndhraPradesh and Telangana). "10. Therefore, the view taken by the Assessing Officer that the partnership firm must explain the source of income for the partners regarding the amount contributed by them towards capital of the firm cannot be sustained in law." 5.1.2. Commissioner of Income-tax, Kottayamv. Sree Ganesh Trading Company, [2019] 107 taxmann.com 130 (Kerala ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome of firm and that partners had no capacity to make such investment - Whether impugned amount could not be assessed in hands of firms - Held, yes" 6. The ld. DR vehemently argued and relied on the order of the ld. CIT(A). The ld. DR invited our attention in specific paragraph of appeal order which is extracted as below: - "During the assessment proceedings, when the AO called upon the appellant firm to explain the credit worthiness of the partners, it was submitted that the said details would be made available after consulting with the Chartered Accountant. However, no such details were furnished either before the AO in the assessment proceedings or during the present appellate proceedings. In the event, though the identity of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted in books of account maintained by concerned partner and that assessee had furnished retails with regard to source of capital introduced in firm and concerned partner had also confirmed such contribution and concluded that assessee had duly discharged onus cast upon it. Further, court noted that if Assessing Officer was not convinced about creditworthiness of partner who had made capital contribution, inquiry had to be made at end of partner and not against firm - Whether SLP against said decision was to be dismissed- Held, yes [Para 2] [ In favour of assessee ]" 7.2 The factual findings rendered by the ld. AO as confirmed by the ld. CIT (A) as is liable for set aside. The ld. DR had not placed any contrary judgment during the hear ..... X X X X Extracts X X X X X X X X Extracts X X X X
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