TaxTMI 
TaxTMI 
TaxTMI 
2011 (1) TMI 1402
X X X X Extracts X X X X
X X X X Extracts X X X X
....the circumstances of the Appellant's case, in upholding the addition of ₹ 9,62,333 made by the Assessing Officer (AO) u/s 68 of the IT Act out of fresh capital introduced at ₹ 14,62,333 by one of the partners during the year. 1.1 The learned CIT(A) erred, on the facts and in the circumstances of the Appellant's case, in coming to the conclusion that the details furnished before him ( CIT(A) ) were additional evidence and that additional evidence cannot be considered by him. The learned CIT(A) erred in not appreciating that explanation of capital introduced was furnished to the AO and that the law did empower him to take additional information / evidence into consideration while disposing of the appeal before him. 1.2....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ring unit of the assessee is located in the Union Territory of Daman, which is a back-ward Union Territory as specified in the VIII Schedule to the I.T. Act. 4. In assessee's appeal the only issue involved is that of share capital introduced by the partner in the firm. During the course of assessment proceedings the AO found that Shri Dipak Soni a partner has introduced capital of ₹ 14,62,333/- as under :- i By cheque ₹ 8,08,948/- ii By cash ₹ 3,00,000/- iii By transfer entry Rs.3,53,385/- Total Rs.14,62,333/- Out of above, the AO accepted the claim of ₹ 5 lacs on the ground that assessee submitted corroborative evidence. He proposed the addition of the rest of the sum of ₹ 9,62,333/- on the groun....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o furnish the above explanations documents before the AO during the course of assessment proceedings. Since the appellant failed to furnish the above details during the course of assessment proceedings the details submitted before me now cannot be considered for adjudication since the same being in the nature of additional evidences. I am constrained to uphold the addition made by the AO. This ground of appeal is accordingly dismissed." 5. Before us the ld. AR submitted that the partner Shri Dipak Soni has admitted to have introduced capital in the firm. Therefore, the firm has discharged the onus and if any amount is found unexplained then action may be taken in the case of the partner as unexplained investment made by him in the firm. H....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the firm, the amount credited to the partners' accounts could not be assessed in the hands of the firm. Once the partners have owned that the monies deposited in their accounts are their own, the Income Tax Officer is entitled to and may proceed against the partners and assess the same in their hands, if their explanation is not found satisfactory. 14. In the facts and circumstances of the present case, both the Deputy CIT (Appeals) and the Tribunal have found that the assessee had discharged the primary onus which was on it by offering explanation, which has not been found to be incorrect or false in any manner. The interest of the revenue is also safeguarded as the Income Tax Officer has been given the liberty to consider the sa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ount should be taken to be the income of the assessee. Once it is established that the amount has been invested by a particular person, be he a partner or an individual, then the responsibility of the assessee is over. Whether that person is an income-tax payer or not and where he had brought this money from, is not the responsibility of the firm. The moment the firm gives a satisfactory explanation and produces the person who has deposited the amount, then the burden of the firm is discharged and in that case that credit entry cannot be treated to be the income of the firm for the purposes of income-tax. On a reference whether the Appellate Tribunal was justified in holding that when there was credit in the capital account of the partn....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... such deduction. 9. The ld. CIT(A) allowed the claim of the assessee holding it to be a business income. 10. We have heard the parties and carefully perused the material on record. The issue is directly covered in favour of the assessee by the decision of the Tribunal in the case of ITO vs. M/s Chirag Plast in ITA No.2415/Ahd/2009 Asst. Year 2006-07 pronounced on 23rd October, 2009 wherein was held as under :- "5. Regarding ground No. 2, we are of the considered view that even if addition is sustained, then assessee would be entitled to deduction under Section 80IB as it would be only the business profit. Section 40(a)(ia) falls in chapter (iv) and under "the head computation of business income." Any addition proposed by the As....