TaxTMI 
TaxTMI 
2023 (12) TMI 32
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.... is a partnership firm which for the assessment year 2014-2015 filed its return of income on 30.09.2014. The appellant had admitted an income of Rs. 1,84,08,230/-. The respondent-Department subsequently subjected the return of the appellant for a limited scrutiny on the ground that there is substantial increase in the capital in the year with mis-matching the sales turnover as reported in the audit report and ITR. 3.2 During the year under consideration, the fixed capital account of the partnership firm got enhanced by Rs. 3.51 crores on account of introduction of new partners. The Assessing Officer thereafter, called for the details from the appellant to which the appellant furnished his response and also gave explanation. The Assessing Officer, subsequently, did not accept the explanation provided by the appellant and passed the order of assessment again on 09.11.2016. While passing the impugned order, the Assessing Officer made an addition of Rs. 2,71,00,000/- being the capital introduced by the partners. That apart, the Assessing Officer added another additional amount of Rs. 54,50,207/- being the capital introduced by the appellant, which was subsequently said to have been ....
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....the appeal there were three substantial questions of law framed. However, while arguing the matter, the learned counsel for the appellant only stressed upon substantial question Nos. 1 and 2 and did not make his submissions so far as substantial question No. 3 is concerned. Hence, we take into consideration the contents of substantial question Nos. 1 and 2, which would clearly reflect that they are intrinsically connected to each other and thus the 1st substantial question of law would be required to be answered together. Hence, we take up both the questions to be considered analogously. 5. It would be relevant at this juncture to take note of the wordings of Section 68 of the Income Tax Act, 1961, for adjudication of the two substantial questions of law, which for ready reference is being reproduced herein under: "Sec: S68. Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of tha....
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....ensively dealt with the issue and have answered the same in a reasoned manner by way of a speaking order. As such, there is no substantial question of law made out by the appellant. It is further contended that since Section 68 of the Act requires plausible explanation in respect of the amount put by the partners towards capital sources of income of the partners. 8. According to the learned counsel for the respondent-Department, since the appellant had not established before the Assessing Officer so far as the cash introduced by the partners in their respective books, but merely reflected in the books of the assessee firm, the Assessing Officer and the Hon'ble ITAT both were justified in dis-allowing the claim of the appellant. 9. Having heard the contentions put forth on either side and on perusal of records, admittedly the appellant herein is a partnership firm. The return was filed by the appellant for the assessment year 2014-15. On 30.09.2014, upon limited scrutiny of the said return filed by the appellant, some discrepancy and mis-match was detected. The Assessing Officer in the course of the assessment, made an addition under Section 68 of the Act to the extent of Rs. ....
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....de contributions, be it in the form of cash or bank guarantees to be furnished to the Government, at the commencement of business. The returns submitted by the respondent-firm were processed, and the facts and figures furnished by it were accepted. However, the matter was reopened at a later point of time. The Assessing Officer treated the capital raised by the firm in the form of contributions made by the partners as income. This conclusion was arrived at on the ground that source of income for the partners was not explained. Learned counsel for the appellant placed reliance upon the judgment of the Patna High Court in CIT v. Anupam Udyog [1983] 142 ITR 133 (Pat). The Tribunal rested its conclusions upon the judgment of the Bombay High Court in Narayandas Kedarnath v. CIT [1952] 22 ITR 18 (Bom) and that of the Allahabad High Court in CIT v. Jaiswal Motor Finance [1983]141 ITR 706(AII)." 13. Recently, again the Division Bench of this Court in somewhat similar case between M/s. Nova Medicare versus The Income Tax Officer, decided on 15.02.2023, relying upon the decision of M. Venkateshwar Rao, supra, in paragraph No. 15 held as under: "Following and applying the aforesai....