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TMI Blog2024 (11) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... s and consequently in the assessee s capital account in M/s.Lakshmi Cold Storage and M/s. Vigneswara Cold Storage. We therefore direct the AO to delete the addition made u/s 68 r.w.s. 115BBE of the Act as the source for the capital investment has been properly explained by the assessee. Cash deposits investments as a capital in the firm - AR failed to explain why the withdrawals of cash was held for a period more than one year for investment into the partnership firm. The burden lies on the assessee to properly explain the cash deposits investments as a capital in the firm. There is merit in the argument of Ld. DR that the assessee has not properly explained the source of investment in capital of the said firm and hence we are of the considered view that since the investment in the firm remains unexplained, we are inclined to sustain the order of the Assessing Officer on this ground. Accordingly Ground No. 4 raised by the assessee is dismissed. Unsecured loans to the assessee - Since the amount has been transferred from the bank accounts of the respective parties wherein the sources for the amounts available in the bank accounts of the parties granting unsecured loans to the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he meaning of section 147 of the Act and thereafter issued notice under section 148 of the Act on 12.03.2020 after obtaining prior approval from the JCIT, Range 2, Guntur. In response, assessee did not file any return of income to the notice issued under section 148 of the Act. However, assessee filed replies to various notices issued under section 142(1) of the Act from time to time. Considering the reply and after examining the submissions made by the assessee, Assessing Officer made the following additions : - i. Addition for cash introduced in the firm under section 68 r.w.s. 115BBE of the Act of Rs. 11,40,665/-. ii. Addition on account of introduction of capital in the firm under section 68 r.w.s. 115 BBE of the Act of Rs. 24,50,000/-. iii. Addition towards investment in two firms of Rs. 1,94,99,178/-. iv. Addition on account of investment of Rs. 1,40,000/-. v. Addition under section 56(2)(x) of the Act of Rs. 9,65,000/-. 3. Being aggrieved by the above additions, assessee filed an appeal before the Ld. CIT(A). Before Ld. CIT(A), assessee made similar submissions which was made before Assessing Officer. Considering the submissions made by the assessee, Ld. CIT(A) dismissed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of Rs. 1,40,000/- made u/s 68 of the Act. c. Delete the double addition of Rs. 9,65,000/- made u/s. 56(2)(ix) and 68 of the Act. 9. For these and other reasons that are to be urged at the time of hearing of the case the appellant prays that the impugned order is liable to be set aside in the interest of justice. 5. Ground Nos. 1, 8 9 are general in nature and needs no adjudication. 6. Ground Nos.2 3 are with respect to the addition of Rs. 1,94,99,178/- made under section 68 of the Act. On this issue, Ld. Authorised Representative [hereinafter Ld.AR ] submitted that the assessee has made investments in the two firms by purchasing two cold storage units which was funded by M/s. A.R. Constructions where the assessee is a Managing Partner. The Ld.AR referring to Page No. 69 of the paper book wherein from the bank account of M/s.A R Constructions an amount of Rs. 1,24,55,600/- transferred to E-Auction account of SBI for the purchase of cold storage units. Ld.AR reiterated that this amount has been debited to the capital account of assessee which is reflected in the books of accounts. Ld.AR also submitted that similar investment of Rs. 86,64,883/-was made for the purchase of cold st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that assessee has withdrawn the cash from his capital account from the partnership firms which is placed in the paper book at page no. 181 disclosing the cash withdrawals during the F.Y. 2015-16. He therefore pleaded that these cash withdrawals have been utilised for the purpose of making investments and hence the source is properly explained. He therefore pleaded that addition made by the Assessing Officer be deleted. 10. Per contra, Ld. DR submitted that the cash drawings were made during the A.Y. 2016-17 whereas the investments in the firm was during the year 2017-18. Assessee has not proved beyond doubt the cash withdrawn has been utilised for the purpose of investments in the firm. He therefore pleaded that the addition be sustained. 11. We have heard both the sides and perused the material available on record and the orders of the lower authorities. It is noticed from the submissions of the Ld.AR that, assessee has made cash withdrawals during the F.Y. 2015-16 which was explained by the Ld.AR was invested in the partnership firm during the year 2017-18. However, Ld.AR failed to explain why the withdrawals of cash was held for a period more than one year for investment into ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted that assessee has introduced capital by way of cash for Rs. 20,000/- and has paid insurance amount for Rs. 1,20,000/- which was credited at the capital account of the assessee. Ld.AR submitted that considering the quantum of cash of Rs. 20,000/- introduced by the assessee as capital which is very nominal amount, hence pleaded to be allowed. Further he also submitted that assessee paid an insurance amount of Rs. 1,20,000/- on behalf of the firm which was credited to the capital account as it has to be reimbursed to the assessee. He therefore pleaded that this amount also may be allowed. 16. Per contra, Ld. DR relied on the orders of the Revenue Authorities. 17. We have heard both the sides and perused the material available on record. From the submissions of the Ld.AR we find there is no justification by the Assessing Officer for treating amount of Rs. 1,40,000/- considering it as unexplained by the assessee, considering the quantum of the cash introduced as capital and the payment of insurance on behalf of the firm. We find that the assessee has properly demonstrated the sources for the said amount of expenditure incurred by the assessee and credited to the capital account of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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