TaxTMI 
TaxTMI 
2026 (6) TMI 34
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.... brief facts of the case are that the assessee had filed its return of income for A.Y. 2016-17 on 27.07.2016 declaring total income of Rs. 26,56,250/-, which was processed u/s 143(1) of the Act. Subsequently, the AO had received an information that the assessee had purchased an immovable property being non-agricultural land for total consideration of Rs. 3,71,71,170/-, during the year. On the basis of this information, the case of the assessee was reopened. In the course of assessment proceeding the assessee had explained that out of the total sale consideration an amount of Rs. 1.10 crore was paid in the A.Y. 2015-16 and the balance amount in the current assessment year. The AO has required the assessee to explain the source of payments ma....
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.... grounds have been taken in this appeal: 1. General Ground The Ld. Commissioner of Income Tax (Appeals) [CIT(A)] erred in law and on facts in confirming the additions made by the Ld. Assessing Officer (AO) amounting to Rs. 40,40,000/-, thereby upholding the assessment order passed u/s 147 r.w.s. 143(3) and 144B of the Income Tax Act, 1961 ('the Act'). The order is bad in law, contrary to the facts, and violates the principles of natural justice. 2. Addition of Partner's Capital Contribution (Rs. 26,40,000/-) 2.1 The Ld. CIT(A) erred in confirming the addition of Rs. 26,40,000/- u/s 68 of the Act treating capital introduced by partners as unexplained cash credit. 2.2 The Ld. CIT(A) failed to ap....
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....nt 4.2 The Appellant submits that the said amount is clearly reflected in the Appellant's Axis Bank Statement on 18.08.2015 (Instrument No. 146840 via HDFC Clearing), which was already placed on record. The finding of the Ld. CIT(A) is thus perverse, factually incorrect, and liable to be set aside. 5. Addition of Unsecured Loan from Vallabhbhai Dadhania (Rs. 12,00,000/-) 5.1 The Ld. CIT(A) erred in confirming the addition of Rs. 12,00,000/- from Shri Vallabhbhai Dadhania solely on the basis of cash deposits in the lender's account, ignoring the direct bank transfer to the Appellant. 5.2 The Ld. CIT(A) failed to appreciate that the loan was subsequently repaid along with interest (TDS deducted) via....
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....ed by the AO. According to the Ld. AR, if the AO was not satisfied with the source of capital introduced by the partners, the addition was required to be made in the hand of the individual partners and not in the hand of the assessee firm. In this regard, the Ld. AR relied upon the decision of jurisdictional High Court in the case of PCIT Vs. Vaishnodevi Refoils & Solvex [89 taxmann.com 80 (Guj)]. He further submitted that the assessee was not required to prove the source of source and, therefore, the addition made by the AO was not correct. As regarding addition of Rs. 12 lakhs in respect of loan from Shri Vallabhbhai Dadhania, the Ld. AR submitted that the AO had given a wrong finding that cash deposit was made in the account prior to iss....
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....ed that the asset was purchased out of the fresh capital introduced by the partners, unsecured loans raised during the year and advance received from the customers. The AO had treated capital introduction to the extent of Rs. 26.40 lakhs from two partners as unexplained and accordingly made the addition in the hand of the assessee firm. The issue of addition in the hands of the firm vis-à-vis the capital introduced by the partners, is no longer res integra. The Hon'ble jurisdictional High Court in the case of Vaishnodevi Refoils & Solvex (Supra) had held that where assessee had furnished details regarding the source of capital introduced in the firm and the concerned partner had also confirmed such contribution, it could be concluded....