ITAT allowed the assessee-firm's appeal and deleted the addition...

ITAT allowed the assessee-firm's appeal and deleted the addition made u/s 69A r/w s.115BBE on account of partners' capital introduction. It held that payments for land purchase were substantially made directly by partners from their bank accounts and duly reflected in registered sale deeds and corresponding journal entries, rendering the AO's factual assumption erroneous. ITAT further held that any unexplained capital introduced by partners is assessable, if at all, in the hands of the respective partners and not the firm. The statutory requirement to prove "source of source" inserted in s.68 w.e.f. 01.04.2023 was held inapplicable to AY 2017-18.

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