TaxTMI 
TaxTMI 
2026 (3) TMI 692
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....e are that the assessee, a partnership firm, consisting of two partners, namely Mr. Anappa Bagi and Ms. Shivaleela S. Bagi. The assessee filed its return of income for the captioned assessment year declaring a total income of Rs. 1,75,580.00 only. 4. On examination of the cash book produced by the assessee, the AO observed that the opening cash balance as per the books was Rs. 12,69,085/- only. Further, on perusal of the capital accounts of the partners, the AO noticed that the opening capital was Rs. 26,42,699/- and the closing capital was Rs. 1,23,38,355/-. Thus, during the year there was an increase in capital of Rs. 96,95,996/-. As per the assessee, out of the increase in the capital Rs. 96,95,996/-, a sum of Rs. 33,90,000/- was introduced by Ms. Shivaleela S. Bagi, partner of the firm. 4.1 When called upon to explain the source of such increase in capital, the assessee submitted that its partners namely Mr. Anappa Bagi and Ms. Shivaleela S. Bagi, have entered into two Joint Development Agreements with Maxworth Reality India Private Limited and an amount of Rs. 48 lakhs (96 lacs gross) had been received during the financial year 2015-16 as advance by each parter. It was s....
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....DA agreement. The assessee also filed date-wise details of the withdrawals made by Mr. Vijay Mahantesh Bagi which, according to the assessee, were utilized for capital introduction in the firm. Additionally, a copy of the bank statement of Mr. Vijay Mahantesh Bagi was also submitted before the Ld. CIT(A) to substantiate the claim of the assessee. 6.2 The Ld. CIT(A), after considering the submissions of the assessee and the materials placed on record, examined the bank statement of Mr. Vijay Mahantesh Bagi. It was observed that an amount of Rs. 10,00,000/- was credited in his bank account on 03.08.2015 through RTGS from Suvirath Silks. Further, amounts of Rs. 13,96,808/- and Rs. 23,94,528/- were credited by bill No. 155 310B00291 on 11.08.2015 and 07.09.2015 respectively. Out of these amounts, cash withdrawals were made on various dates, namely Rs. 10,00,000/- on 04.08.2015 Rs. 8,00,000/- on 13.08.2015 Rs. 5,98,000/- on 17.08.2015 Rs. 6,00,000/- on 08.09.2015 and Rs. 5,50,000/- on 09.09.2015. The assessee contended that these withdrawals were handed over to the assessee firm and were subsequently introduced as capital. 6.3 However, on careful examination of the bank statement ....
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.... 8.2 The Ld. AR further submitted that the Ld. CIT(A) has misread the facts while observing that the amounts credited in the bank account of Sri Vijay Mahantesh Bagi were not relatable to the refundable deposit received under the JDA. It was contended that the deposits in the bank account correspond with the amounts received under the JDA and therefore the finding recorded by the Ld. CIT(A) is contrary to the materials placed on record. 8.3 The Ld. AR also submitted that the Ld. CIT(A) erred in disregarding the affidavit filed by the assessee. It was argued that an affidavit is a sworn statement made on oath and constitutes a valid piece of evidence unless the contents thereof are disproved by the Revenue. Reliance was placed on the decision of the Hon'ble Supreme Court in the case of Krishan Chander Nayar vs. Chairman, Central Tractor Organisation (3 SCC 187) to contend that such sworn statements cannot be brushed aside without establishing that the facts stated therein are incorrect. 8.4 Without prejudice, the Ld. AR submitted that the addition has been made in the hands of the partnership firm even though the amount in question represents capital introduced by a partner....
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.... the refundable deposit was credited, and the details of withdrawals made from the said bank account. From the bank statement placed on record, it is noticed that the amounts were credited on 03.08.2015, 05.08.2015 and 03.09.2015 aggregating to Rs. 48,00,000/- and cash withdrawals were made thereafter on various dates amounting to Rs. 35,48,000/-. Thus, the withdrawals clearly follow the deposits made in the said bank account. 10.2 The explanation of the assessee that the amount received under the JDA was credited in the bank account of Sri Vijay Mahantesh Bagi and the same was subsequently withdrawn and introduced as capital in the partnership firm has not been disproved by bringing any contrary material on record by the Revenue authorities. The mere fact that the said bank account stands in the name of the son of the partner cannot by itself lead to the conclusion that the source of capital introduced in the firm remains unexplained, particularly when the assessee has furnished the supporting documentary evidence including the JDA agreement and the bank statement evidencing the flow of funds. 10.3 We also find merit in the contention of the assessee that where capital is in....