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TMI Blog2024 (9) TMI 474X X X X Extracts X X X X X X X X Extracts X X X X ..... ds of the Partners and not against Partnership firm. This view of Gujarat High Court was confirmed by Hon ble Supreme Court, [ 2018 (7) TMI 651 - SC ORDER] . Thus the findings arrived by Ld. CIT(A) does not require any interference and further Revenue could not place any materials in support of its ground. Decided against revenue. - Shri T.R. Senthil Kumar, Judicial Member And Shri Makarand Vasant Mahadeokar, Accountant Member For the Assessee : Shri D.K. Parikh, A.R. For the Revenue : Smt. Trupti Patel, Sr.D.R. ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the Revenue as against the appellate order dated 27.12.2023 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loan from either partners or external sources. Through banking channel, the partners introduced capital to the appellant firm. Thus, the appellant fulfilled it's obligation as required under section 68 of the Act and was not required to explain the sources of the funds in the hands of the partners. While it is true that one of the partners of the appellant firm obtained loan through shady transactions as noted above in this order, the appellant firm was not responsible for the actions of the partners. Any actions that need to be taken should be taken in the case of partners. 7.3 The views expressed above are supported by the decisions of the Hon'ble High Court and Tribunals as listed below:. The Hon'ble Gujrat High Court in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;ble Tribunal as well as CIT(A) held that once it is established that the amount has been invested by a particular person, be it partner or individual, then the responsibility of the firm is over. 7.5 The Hon'ble Cuttack ITAT in the case Panda Fuels vs ITO(ITA 07/CTK/2018 held that a firm can't be assessed under section 68 of the Income Tax Act, 1961 in respect of capital introduced by the partners. In the case of Shiri Gem vs ITO it is held by Hon'ble Delhi Tribunal In the case amount in question was deposited by the partners as the capital, therefore even if the Assessing Officer was not satisfied with the explanation, it can't be added in the assessee firm. At the most it can be considered in the hands of the individua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng for the Revenue supported the order passed by the Assessing Officer and requested to uphold the same. However she could not place on record any decision in favour of the Revenue. 7. We have given our thoughtful consideration and perused the materials available on record. The Ld. CIT(A) had already extracted Jurisdictional High Court judgment in his order which is extracted at Para 4 above. When the Assessing Officer is of the view that creditworthiness of Partners who introduced capital had not been proved in that case, enquiry and additions had to be made in the hands of the Partners and not against Partnership firm. This view of Gujarat High Court was confirmed by Hon ble Supreme Court by dismissing the SLP filed by the Revenue reporte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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