9911796707
TMI Blog2023 (10) TMI 1131X X X X Extracts X X X X X X X X Extracts X X X X ..... Act') erroneous and prejudicial to the interest of Revenue and setting aside the issue to the file of the Ld. AO with a direction upon him to pass a fresh assessment only to the extent of the issues in respect of the provision of Section 40A(3) of the Act with proper enquiry and verification of the claim and its genuineness for A.Y. 2017-18. 2. The short fact leading to the case is this that the assessee by paying huge cash in excess of Rs. 20,000/- alleged to have violated the provision of Section 40A(3) of the Act. The details whereof has been reproduced in the order passed by the Ld. CIT(A) in the following manner: Sr. No. Voucher No. Date Name of the Party Amount paid in excess of Rs. 20,000/- Remarks 1 110 30-04-2016 Animes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00.00 3. The Ld. PCIT is of the opinion that the Ld. AO failed to enquire the above aspect in the books of accounts including the cash book and vouchers while completing the assessment in the case of the assessee. A show cause notice, therefore, dated 20.07.2021 was issued proposing to subject the assessment order of the Ld. AO to revision under Section 263 of the Act. The same annexed to the paper book filed by the assessee appearing at Page No.3 to 5 therein is also reproduced herein below: 4. Followed by further notice dated 11.12.2021, which are reproduced herein below: 5. On 3rd August, 2021, the assessee duly replied to the issue involved in the proceeding initiated under Section 263 of the Act by the Ld. PCIT, appearing at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 269SS of the Act. Despite the position as laid down by the Supreme Court, the legal status of a partnership firm vis-à- vis its partners have always been under debate and so is the applicability of Section 269SS or 269T to money advanced by partner to his firm relying upon this decision, the High Court of Delhi in the case of CIT vs. Muthoot Financiers ITA No. 336, 338, 341 and 345 of 2002 dated 03.02.2015 has held that Section 269SS of the Act would not be violated when money is exchanged inter-se between the partners and the partnership firm. Similar position applies to the receipt and payment of partner's capital by partnership firm as held in the case of ITO vs. Universal Associates ITA No. 1349/Ahd/2010 date 17.06.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en annexed to the paper book. It, therefore, appears that the impugned payment being the withdrawal by the partner from the firm has duly been considered by the Ld. AO during the course of assessment proceeding and only upon due application of mind, the same has been not disputed. 8. On the other hand, Ld. DR relied upon the order passed by the Ld. PCIT holding the order passed by the Ld. AO dated 10.12.2019 under Section 142(3) of the Act erroneous and prejudicial to the interest of the Revenue. 9. Upon considering the documents annexed to the paper book as indicated in the foregoing paragraph, we find substance in such arguments made by the Ld. DR. Furthermore, it is a settled principle that the capital cannot be attributable as expense ..... X X X X Extracts X X X X X X X X Extracts X X X X
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