TaxTMI 
TaxTMI 
2022 (12) TMI 303
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....tal income of Rs. Nil. The assessee is a partnership firm mainly engaged in the business of a builder and contractor. During the course of assessment, the Assessing Officer observed that the assessee made certain additions to its capital. The assessee was asked to prove the identity, genuineness of the transaction and creditworthiness of the depositors /partners introducing the capital. Despite several opportunities, the assessee could not provide the details and vide letter dated 16-03-2016, the assessee expressed inability to provide even the confirmations of the Partners. Accordingly, the Assessing Officer held that the assessee comprehensively failed to furnish any positive evidences. The Assessing Officer held that the capital introduced by three partners amounting to Rs. 1,93,84,419/- is unexplained cash introduced as capital by the assessee and hence treated the same as unexplained income of the assessee firm u/s 68 of the Act. Further, the Assessing Officer held that the interest expenditure on such capital introduced should also be disallowed u/s 37(1) r.w.s. 36(1)(iii) of the Act. The Assessing Officer therefore disallowed an amount of Rs. 20,46,990/- out of the above int....
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....o develop the same by forming partnership firm amongst the partners. With this intention, an agricultural land was acquired in proportion to the share of profit in the firm by the partners. Since, the said land was agricultural land, the partnership firm cannot directly acquire the land in its own name as the Revenue Laws of the State of Gujarat does not permit developimg agricultural land by a Partnership Firm. Therefore, the land was acquired in the name of the Partners. As and when the permission to convert agricultural land into non-agricultural land from the concerned authority was to be received, the sale deed can be executed in the name of the partnership firm. The assessee filed a copy of the "agreement to sale" executed between the partners and the farmer/seller of the land. The assessee further submitted that capital contribution made to acquire the land was in tranches, however, the ld. Assessing Officer assumed that the entire consideration was paid during the year under consideration. The assessee further submitted before the CIT(A) that there was a dispute between the partners and owing to the same the assessee could not place on record details asked for by the Assess....
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....e of the appellant for its admissibility for filing the additional evidences and has urged this office not to admit such evidences without mentioning any whisper on the merits of the case. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx The factual details from the facts on record emerge as under: Sr. No Name of partner Amount added u/s 68 of the Act : Amount Identity Creditworthiness Genuineness 1 PRAVINB HAI SHANTILA L PATEL 7143803/- (includes interest of Rs.6,82,330/-) Copy of Return (page- 01/PB) Bank Statement v(PP 2-7/PB) Confirmation filed. 2 UMESHB HAI RAMANBH Al PANCHAL 7143803/- (includes interest of Rs.6,82,330/-) Copy of Return (page- 10/PB) Bank Statement (PP 11-15/PB) Confirmation filed. 3 DHARME NDRAB HAI SHANTIB HAI PATEL 7143803/- (includes interest of Rs.6,82,330/-) Copy of Return (page- 18/PB) Bank Statement (PP 19- 21/PB). Confirmation filed. Total Rs.2,1 4,31 ,409/ Capital Amount Rs.1, 93,84,419 + Interest Rs.20,46,990/- The ledger account for each of the partner has been filed at page number 8-9/Pravin,16-17/Umesh....
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....1 is hereby deleted. The ground No.1 & 2 of appeal are accordingly allowed." 5. Before us, the Departmental Representative invited our attention to page 8 of the CIT(A)'s order (Remand Report issued by the Assessing Officer) wherein the Assessing Officer has pointed out that on verification of bank statements of the partners' bank accounts, it is noticed that there was immediate credit entries preceding the transfer entries to the firm as capital by the partners. Moreover, the bank statement also reveals that most of the time the bank balance is having minimum deposit and before transferring amount to assessee's account immediately before that, nearly the same amount was credited by transfer in the bank accounts of the partners. Hence, genuineness of the transaction could not be established in totality. The Departmental Representative primarily relied upon the observations made by the ld. Assessing Officer in the assessment order. 5.1 In response, the counsel for the assessee drew our attention to findings of CIT(A) at page 17 of the CIT(A)'s order. The counsel for the assessee submitted that in the appeal proceedings all necessary documents were furnished and hence primary onus....