2006 (12) TMI 492

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....on of Rs. 70,000 made by the Assessing Officer and confirmed by the CIT(A) on account of cash credits under section 68 of the Income-tax Act, 1961 ?" 2. During the course of assessment for the assessment year 1987-88, the Assessing Officer found that Smt. Kamlesh Rani, partner introduced a sum of Rs. 40,000 in her capital account on 21-3-1987. She explained that she was a regular assessee for the last several years and apart from being a partner of the assessee-firm, she had income from interest and other sources, which were declared under the Amnesty Scheme. She had also deposited a sum of Rs. 30,000 in her account, which she had received by way of gifts and shaguns at the time of her marriage in 1986. The Assessing Officer did not a....

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....peal." 5. We are also in agreement with the view taken by the Tribunal that no case was made out for addition to the income of the firm even if deposits made with the firm by the partners were unexplained income of the partners. This view has been taken by us in our recent order passed on 6-11-2006 in CIT v. Metal & Metals of India [IT Appeal No. 370 of 2006], wherein it was observed as under : "In the present case, the firm has given explanation about the source namely Suresh Bhandari, partner, who himself is an assessee. The said partner has admitted having made deposit with the firm. Thus, as far as the firm is concerned, even if the gift claimed to have been received by Suresh Bhandari is to be rejected, the said Suresh Bhan....

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....e no materials on which the department could have come to the conclusion that these credits represented undisclosed profits of the firm.") 8. In Orissa Corpn. (P.) Ltd.'s case (supra), the Hon'ble Supreme Court observed as under : "In this case, the assessee had given the names and addresses of the alleged creditors. It was in the knowledge of the revenue that the said creditors were income-tax assessees. Their index numbers were in the file of the revenue. The revenue, apart from issuing notices under section 131 at the instance of the assessee, did not pursue the matter further. The revenue did not examine the source of income of the said alleged creditors to find out whether they were creditworthy or were such who could advan....