2019 (2) TMI 657

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....explained credits made addition of was Rs. 13,60,000/- under Section 68 of the Act, 1961. Since the respondent/assesee was not represented, despite notice having been served, we appointed Advocate Aleena Maria Jose as Amicus Curiae. 2. The question of law raised is as to whether the Tribunal was correct in having deleted the additions, since the creditworthiness of the donor, to the three partners, who are said to have given advances to the firm, had not been established. 3. The learned Standing Counsel for the Revenue submits that the assessee, on being asked to explain the credits, pointed out three partners, who had advanced loans of Rs. 2,00,000/-, 7,15,000/- and 4,45,000/- respectively. The said partners were K.J. Jayaprakash, G. Raj....

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....at a satisfactory explanation, in so far as an unexplained credit, has to be on three grounds; the identity of the creditor, his creditworthiness and the genuineness of the transaction. Here, the creditors are the partners of the firm and hence there could be no dispute raised on genuineness, for the partners having admitted advance of money made to the firm, especially in the first year of business. As to the creditworthiness, it is contended that the assessee's obligation is only to satisfy the creditworthiness of the person, who is pointed out as the donor and the donor's source need not be looked into for the purpose of considering the addition in the case of the partnership firm. Though the partners and the firm are not, in com....

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....other person, who returned the money with interest, totalling Rs. 1,25,000/-, out of which the amounts were paid to Sri.K.J. Jayaprakash. 9. Rs. 7,15,000/- was owned up by one G.Rajagopalan, another partner, who claimed the amount as having been received from his own wife. His wife's brother one Surendran, who was working abroad, is said to be the source of the said amounts. It was found that Sri.Surendran was working abroad, but he was not able to make any remittance directly to his Bank Account for reason of he, having not been able to get an ACCAMA [which the Assessing Officer finds is akin to a Ration Card, which alone would enable the opening of a Bank Account in the Gulf countries]. The fact that Sri.Surendran was working abroad ....