BURHANI EXPLOSIVE,SAMBALPUR V. INCOME TAX OFFICER, ITO WARD 1(1), AAYAKAR BHAWAN, AINTHAPALI, SAMBALPUR

ITA 355/CTK/2025

AI Insights

The case involves Burhani Explosive Bhatra, a partnership firm, appealing against the order of the CIT(A), National Faceless Appeal Centre, Delhi, for the assessment year 2017-2018. The firm was aggrieved by the addition of unexplained income due to capital introduced by its partners, Mr. Hussaini Lokhandwala and Mrs. Tasneem Hussain. The AO had treated the capital introduced by both partners as unexplained income of the firm, questioning the source of the capital. The Tribunal, after considering the submissions and the facts, decided that the addition should have been made in the hands of the partners rather than the firm, leading to the allowance of the appeal and deletion of the addition.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 717331 (ITAT-CUTTACK)
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Appeal Filed On: 10-06-2025
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY SINGH
• Assessee Lawyers: K.K.BAJORIA
• Keywords: Condonation of delay

Judgement Text

" आयकर अपीलीय अधिकरण, कटक न्यायपीठ,कटक IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK (THROUGH VIRTUAL HEARING) श्री जाजज माथन, न्याययक सदस्य एवं श्री राजेश क ुमार, लेखा सदस्य क े समक्ष । BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER आयकर अपील सं/ITA No.355/CTK/2025 (नििाारण वर्ा / Assessment Year : 2017-2018) Burhani Explosive Bhatra, Dhanupali, Sambalpur Vs ITO Ward-1(1), Sambalpur PAN No. : AAKFB 3596 N (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) नििााररती की ओर से /Assessee by : Shri K.K.Bajoria, CA राजस्व की ओर से /Revenue by : Shri Vijay Singh, Sr. DR सुनवाई की तारीख / Date of Hearing : 11/08/2025 घोषणा की तारीख/Date of Pronouncement : 11/08/2025 आदेश / O R D E R Per Bench : This is an appeal filed by the assessee against the order dated 16.02.2023 passed by ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi, for the assessment year 2017-2018. 2. The appeal of the assessee is barred by 772 days. In this regard, the assessee has filed an application for condonation of delay supported with an affidavit stating therein sufficient reasons for delay, which are plausible and not found to be false. Accordingly, delay of 772 days in filing the present appeal by the assessee is condoned and the appeal is admitted for hearing. Printed from counselvise.com ITA No.355/CTK/2025 2 3. It was submitted by the ld. AR that the assessee is a partnership firm consisting of two partners, namely, Mr. Hussaini Lokhandwala and Mrs. Tasneem Hussain. It was the submission that one of the partner Shri Hussaini Lokhandwala had introduced capital in cash of Rs.3,19,780/-. It was the submission that Mrs. Tasneem Hussain had introduced capital to an extent of Rs.9 lakhs. It was the submission that on the ground that the partner who are not able to prove the source of the capital introduced the capital introduced by both the partners were treated by the AO as unexplained income of the assessee firm. It was the submission that if at all the AO doubted the source in the hands of partners, the addition should to be made in the hands of partner and not in the hands of the assessee-firm 4. In reply, ld. Sr. DR vehemently supported the order of the ld.AO & ld. CIT(A). 5. We have considered the rival submissions. A perusal of the assessment order shows that the AO has questioned he introduction of capital by the two partners. Both partners for admitted to the introduction of capital. Both the partners have been questioned regarding source for the capital introduced. Both partners have given explanation. The explanations were not accepted and the capital introduced by both the partners have been treated as undisclosed income in the hands of the assessee. When both the partners have categorically admitted to the introduction of the share capital and when the AO is questioning the source for the capital introduced in the partners’ hands if the AO is not Printed from counselvise.com ITA No.355/CTK/2025 3 satisfied with the explanation given by the partners, then such addition should have been resorted to in the hands of partners not in the hands of assessee firm. In view of the above, the addition made by the AO and confirmed by the ld. CIT(A) in the hands of assessee is not sustainable and consequently we delete the same. 6. In the result, appeal of the assessed is allowed Order dictated and pronounced in the open court on 11/08/2025. Sd/- (राजेश क ुमार) (RAJESH KUMAR) Sd/- (जाजज माथन) (GEORGE MATHAN) लेखा सदस्य/ ACCOUNTANT MEMBER न्यानयक सदस्य / JUDICIAL MEMBER ददनाांक Dated 11/08/2025 Prakash Kumar Mishra, Sr.P.S. आदेश की प्रनतललपप अग्रेपर्त/Copy of the Order forwarded to : आदेशािुसार/ BY ORDER, (Assistant Registrar) आयकर अपीलीय अधिकरण, कटक/ITAT, Cuttack 1. अपीलार्थी / The Appellant- 2. प्रत्यर्थी / The Respondent- 3. आयकर आयुक्त(अपील) / The CIT(A), 4. आयकर आयुक्त / CIT 5. विभागीय प्रविविवि, आयकर अपीलीय अविकरण, कटक / DR, ITAT, Cuttack 6. गार्ज फाईल / Guard file. सत्यापपत प्रयत //True Copy// Printed from counselvise.com "