INCOME TAX OFFICER, DHULE V. KRISH TRADERS, NANDURBAR

ITA 2151/PUN/2025

AI Insights

The case involves an appeal by the Income Tax Department against the order of the CIT(A)/NFAC, which had allowed the appeal of the assessee, Krish Traders, a partnership firm. The Assessing Officer had made additions to the income of Krish Traders under Section 68 for unexplained cash credits and under Section 69A for unexplained cash deposits during the demonetization period. The CIT(A) deleted these additions, leading to the Revenue's appeal. The Tribunal's decision was influenced by the judicial precedent that additions for a partner's capital contribution should be made in the partner's hands, not the firm's.

• Duration Of Justice: 6 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2026
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Pune
• Assessment Year: 2017-2018
• Appeal Filed On: 17-09-2025
• Other Referred Cases: PCIT Vs Vaishno Devi Refills & Solvex, ACIT Vs Ambika Enterprises
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BASAVARAJ HIREM ATH
• Assessee Lawyers: P. R. MANDONE; N.C. LAHOTI
• Keywords: Set aside; Additional evidence; Unexplained cash credit; Accommodation entries; Source of fund
• Section: 142(1); 68

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “A”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.2151/PUN/2025 िनधाŊरण वषŊ / Assessment Year : 2017-18 ITO, Dhule. Vs. Krish Traders, Krida Bhavan Building, Behind Municipal Council, Nandurbar, Dhule- 425412. PAN : AAQFK7177E Appellant Respondent C.O. No.2/PUN/2026 (Arising out of ITA No.2151/PUN/2025) िनधाŊरण वषŊ / Assessment Year : 2017-18 Krish Traders, Krida Bhavan Building, Behind Municipal Council, Nandurbar, Dhule- 425412. PAN : AAQFK7177E Vs. ITO, Dhule. Appellant Respondent आदेश / ORDER PER VINAY BHAMORE, JM: This appeal filed by the Revenue is directed against the order dated 10.07.2025 passed by Ld. CIT(A)/NFAC for the assessment Revenue by : Shri Basavaraj Hiremath Assessee by : Shri P. R. Mandone & Shri N. C. Lahoti Date of hearing : 06.01.2026 Date of pronouncement : 27.03.2026 Printed from counselvise.com ITA No.2151/PUN/2025 C.O. No.2/PUN/2026 2 year 2017-18. The assessee is also in cross objection bearing C.O. No.2/PUN/2026 against the appeal of the Revenue. 2. Facts of the case, in brief, are that the assessee is a partnership firm and has furnished its return of income on 01.11.2017 by declaring income of Rs.34,69,000/-. The return was processed u/s 143(1) of the IT Act. Subsequently, the case was selected for scrutiny under CASS. Accordingly, statutory notices u/s 143(2) and 142(1) of the IT Act respectively were issued to the assessee. During the course of assessment proceedings, it was found by the Assessing Officer that capital of Rs.4,22,41,781/- was introduced by one of the partner, namely, Shri Rajkumar S. Noutwani which includes cash of Rs.2,21,76,706/- and by bank entries Rs.2,00,65,075/-. The Assessing Officer also found that the source of such large cash and cheque contributions remained unsubstantiated. The balance sheets of the proprietary concerns reflected significant negative capital, and no cash flow statements were submitted. Therefore, the Assessing Officer treated the entire amount as unexplained cash credit u/s 68 of the IT Act. Further, the Assessing Officer found that the assessee deposited cash of Rs.39,97,500/- during the demonetization period, while the cash Printed from counselvise.com ITA No.2151/PUN/2025 C.O. No.2/PUN/2026 3 balance as on 08.11.2016 was Rs.30,35,650/-, leading to an addition of Rs.9,61,850/- u/s 69A as unexplained money. 3. Being aggrieved with the above assessment order, the assessee preferred an appeal before Ld. CIT(A)/NFAC. After considering the submissions of the assessee and remand report furnished by the Assessing Officer, Ld. CIT(A)/NFAC allowed the appeal of the assessee by deleting the additions of Rs.4,22,41,781/- u/s 68 & Rs.8,39,000/- (out of Rs.9,61,850/-) u/s 69A of the IT Act made by the Assessing Officer in the assessment order. 4. It is the above order against which the Revenue is in appeal before this Tribunal and the assessee is in cross objection against the appeal of the Revenue. 5. First, we shall take up the appeal of the Revenue in ITA No.2151/PUN/2025 for adjudication. ITA No.2151/PUN/2025, By Revenue : 6. The Revenue has raised the following grounds of appeal :- “1. On the facts and circumstances of the case and in law, the Ld. CIT(A)/NFAC erred in deleting the addition of 4,22,41,781/- made u/s 68 of the Income-tax Act, 1961 on account of capital introduced by partner Shri Rajkumar S. Noutwani, without appreciating the fact that the assessee failed to establish the genuineness of transactions and true source of such huge cash/cheque contributions, especially when proprietary Printed from counselvise.com ITA No.2151/PUN/2025 C.O. No.2/PUN/2026 4 concerns of the partner reflected negative capital balances and also there was absence of corroborative cash flows. 2. The Ld. CIT(A) erred in holding that mere production of audited statements, self-maintained books, and internal ledger entries of proprietary concerns discharged the onus under section 68, ignoring the fact that no independent third-party confirmations, reconciliations, or credible evidence were furnished to substantiate real source of funds. 3. The Ld. CIT(A) erred in relying heavily on additional evidences furnished at appellate stage under Rule 46A, without proper verification, ignoring that during assessment proceedings the assessee failed to submit complete cash flow statements or bank withdrawals tallying with alleged cash introduction. 4. On the facts and in law, the Ld. CIT(A) erred in deleting the addition of ₹9,61,850/- made u/s 69A towards unexplained cash deposits during demonetisation, merely on the basis of self- serving records and a post-facto bank certificate, without appreciating that the assessee could not demonstrate contemporaneous availability of cash or reconcile deposits with cash book entries. 5. The Ld. CIT(A) failed to appreciate that the pattern of cash deposits and immediate issuance of cheques suggested accommodation entries and lacked credibility, warranting confirmation of additions made by the AO. 6. The order of the Ld. CIT(A) is contrary to facts and law, hence liable to be set aside and that of the AO be restored. 7. The appellant craves leave to add, amend, alter, or withdraw any ground of appeal at the time of hearing.” 7. We have heard Ld. Counsels from both the sides and perused the material available on record including the paper book furnished by the assessee. In this regard, we find that Ld. CIT(A)/NFAC called for remand report from the Assessing Officer since the assessee partnership firm filed various additional evidences. After considering the remand report, Ld. CIT(A)/NFAC deleted the Printed from counselvise.com ITA No.2151/PUN/2025 C.O. No.2/PUN/2026 5 addition of Rs.4,22,41,781/- and restricted the addition of Rs.9,61,850/- to Rs.1,22,850/- only by observing as under :- “7.3 Ground No. 2:- The next ground is with regard to addition of Rs.4,22,41,781/- under Section 68 of the Income Tax Act, 1961 on account of capital contribution made by Mr. Raj Kumar S. Noutwani, one of the partners of appellant firm. The appellant firm has filed detailed submissions with regard to this ground and has primarily objected the addition on the premise that the addition in respect of capital contribution by the partner cannot be added in the hands of partnership firm under Section 68 of the Act and in case the source of the partner’s capital is not established, then such amount maybe considered to be added in the hands of the concerned partner only. The appellant has relied upon few decisions in support of above point. The case of the appellant gets support from the decision of Hon’ble High Court of Gujarat in the case of PCIT Vs Vaishno Devi Refills & Solvex (Tax Appeal No. 846 of 2017), where in while dismissing the appeal of the revenue Hon’ble High Court observed ‘when the appellant has furnished the details with regard to the source of the capital introduced in the firm and the concerned partner had confirmed such contribution, the appellant had duly discharged the onus cast upon it. Thereafter, if the Assessing Officer was not convinced about the creditworthiness of the partner who had made the capital contribution, the inquiry had to be made at the end of the partner and not against the firm.’ Thereafter, Hon’ble Apex Court dismissed the special leave petition filed by the revenue against the decision of Hon’ble High Court vide decision dated 09.07.2018 (Special Leave Petition (Civil) Diary Number 22842 Of 2018). Recently, Delhi bench of the Income Tax Appellate Tribunal in the case of ACIT Vs Ambika Enterprises (ITA No. 31/ 2020) relying upon a number of judicial precedents, has passed the order in favour of the appellant on the same point. 7.3.1 The submissions of the appellant have been perused and it seems that the courts have held that the addition in respect of the capital contribution by the partner in partnership firm can be made in the hands of concerned partner and not in the hands of partnership firm. Therefore, the addition made by assessing officer in respect of capital contribution by Raj Kumar S. Noutwani is not as per spirit of law. 7.3.2 It is further seen that the concerned partner, Mr. Raj Kumar S. Noutwani had been the proprietor of six proprietary firms namely Erandol Wines, Vaspan Wines, Jamner Wines, N.N. Wines, Ahura Wines & Dinesh Wines and had withdrawn the amount from such Printed from counselvise.com ITA No.2151/PUN/2025 C.O. No.2/PUN/2026 6 proprietary firms in cash and though banking channels and deposited the same amount in the appellant firm as capital contribution. The appellant has furnished the copy of the capital account of Mr. Noutwani in Krish Traders and the copy of audited financial statements of all the proprietary firms of Mr. Noutwani for the relevant year, before the AO as can be seen from the assessment order, para7 ii a. The AO has stated in the same paragraph that the transfer of funds from the five proprietary concerns of the partner as capital contribution in the appellant firm becomes further doubtful due to the fact that the balance sheet of these proprietary concerns do not show any investment in the name of the appellant firm and the closing balance of capital accounts in these firms show huge negative balance. The said point raised by the AO has been aptly answered by the appellant by explaining that the amount withdrawn by the Mr Noutwani, hereinafter called as the partner, from each proprietary concerned was debited to the capital account of the proprietor and that is why it does not appear in the assets side of the balance sheet and that is again the reason why the capital account in the proprietary concerns shows huge negative balance. This is a very simple and correct accounting explanation which appears to have been overlooked by the AO. The appellant has also submitted the following in respect of all the proprietary firms as below: - 7.3.3 Vaspan Wines – (Cash of Rs. 20,50,000 and cheque of Rs. 21,25,000) The appellant produced the cash book, ledger etc. of Vaspan Wines in the course of appellate proceeding and the same was examined by the AO in the course of submitting the remand report. The AO has confirmed that the said transactions are duly reflected in the books of the concerned. The AO has further stated that there are no entries for cash withdrawal of the above amounts in the books and there is a cash deposit of Rs. 21,00,000/- on 05.12.2016 which was transferred to the appellant firm on 06.12.2016. Now the only question that remains to be decided is whether the partner had sufficient cash in the books of Vaspan Wines to explain the source of cash transfer of Rs. 20,50,000/- to the appellant firm and to explain the source of cash deposit of Rs. 21,00,000/- on 05.12.2016. The appellant has submitted that Vaspan Wines was running a retail liquor shop till the FY 2015-16, having most of the sales in cash and as per the audited books of M/s Vaspan Wines, it had closing cash in hand Rs. 45,54,084/-, which becomes the opening cash balance for the FY 2016- 17, which explains the cash component of the transfers made to the appellant firm. It is a well-known fact that bulk of retail liquor sales especially during FY 2016- 17 used to take place in cash. Thus, the said figures Printed from counselvise.com ITA No.2151/PUN/2025 C.O. No.2/PUN/2026 7 are more than sufficient to explain the source of Rs. 41.75 lakhs which Mr Noutwani had withdrawn such amount from Vaspan Wines during the relevant year and deposited into the appellant firm being capital contribution in cash and through cheques after depositing the cash into bank account. The appellant has furnished the copy of audited balance sheet of Vaspan Wines for A.Y. 2016-17, cash book and bank book for the relevant year of Vaspan Wines to justify the above. The submissions and details filed by the appellant firm have been verified and appears to be correct. Thus, the source of amount in the hands of proprietary firm of Mr. Noutwani for making capital contribution in the appellant firm stands explained. Accordingly, the action of the AO in making the addition is not warranted. 7.3.4 Jamner wines – Cheque of Rs. 12,59,000 The appellant produced the cash book, ledger etc. of Jamner Wines in the course of appellate proceeding and the same was examined by the AO in the course of submitting the remand report. The AO has confirmed that the said transactions are duly reflected in the books of the concerned. The AO has further stated that there was cash deposit of corresponding amounts on 29.11.2016, 09.12.2016 and 28.02.2017 following which there was transfer of corresponding funds totalling to Rs. 12.59 lakhs to the appellant firm. Now the only question that remains to be decided is whether the partner had sufficient cash in the books of Jamner Wines to explain the source of cash deposit of Rs. 12,59,000/- before issue of cheques to the appellant firm. The appellant has submitted that Jamner Wines was running a retail liquor shop till the FY 2015-16, having most of the sales in cash and as per the audited books of M/s Jamner Wines, it had closing cash and bank balance of Rs. 32,05,897/-, which becomes the opening balance for the FY 2016-17, which is sufficient to explains the transfers made to the appellant firm. Thus, the said figures are more than sufficient to explain the source of Rs. 12.59 lakhs which Mr Noutwani had withdrawn such amount from Jamner Wines during the relevant year and deposited into the appellant firm being capital contribution through cheques after depositing the cash into bank account. The appellant has furnished the copy of audited balance sheet of Jamner Wines for A.Y. 2016-17, cash book and bank book for the relevant year of Jamner Wines to justify the above. The submissions and details filed by the appellant firm have been verified and appears to be correct. Thus, the source of amount in the hands of proprietary firm of Mr. Noutwani for making capital contribution in the appellant firm stands explained. Accordingly, the action of the AO in making the addition is not warranted. Printed from counselvise.com ITA No.2151/PUN/2025 C.O. No.2/PUN/2026 8 7.3.5 Ahura wines – (Cash of Rs. 55,00,000 and Cheque of Rs. 65,30,000) The appellant produced the cash book, ledger etc. of Ahura Wines in the course of appellate proceeding and the same was examined by the AO in the course of submitting the remand report. The AO has confirmed that the said transactions are duly reflected in the books of the concerned. The AO has further stated that there are no entries for cash withdrawal corresponding to the amount of Rs. 55,00,000/- in the books and there is a cash deposit of Rs. 30,00,000/- on 10.11.2016, Rs.20,00,000/- on 11.11.2016 before issuing the cheque to the appellant firm and receipt of cheque of Rs.17,30,000/- on 28.02.2017 and Rs.20,99,790/- on 14.03.2017 respectively from Raj Wines which was transferred to the appellant firm as capital contribution shortly thereafter. The receipt of funds from Raj Wines is found duly explained as per the books of Raj Wines and the only question that remains to be decided is whether the partner had sufficient cash in the books of Ahura Wines to explain the source of cash transfer of Rs. 50,00,000/-. The appellant has submitted that Ahura Wines was running a retail liquor shop till the FY 2015-16, having most of the sales in cash and as per the audited books of M/s Ahura Wines, it had closing cash balance Rs. 60,74,304/- and closing balance of sundry debtors amounting to Rs. 2,25,30,487/-, which becomes the opening balance for the FY 2016-17. Further, the appellant has furnished books to explain further collection from the debtors in addition to the opening cash balance, which explains the cash component of the transfers made to the appellant firm. It is seen that the concern had an opening cash balance of more than Rs. 60 lakhs and debtors of Rs. 2.25 Cr. Thus, the said figures are more than sufficient to explain the source of capital contribution which Mr Noutwani had withdrawn such amount from Ahura Wines during the relevant year and deposited into the appellant firm being capital contribution in cash and through cheques after depositing the cash into bank account. It is also observed that Ahura Wines had received Rs. 17,30,000/- on 28.02.2017 and Rs. 20,99,790/- on 14.03.2017 from M/s Raj Wines and given the same amounts to appellant firm. Mr. Noutwani is also in partner in M/s Raj Wines and the amount received by Ahura Wines (one of the proprietary firms of Mr. Noutwani) from M/s Raj Wines was on account of recovery of outstanding advances. The appellant has furnished the copy of audited balance sheet of Ahura Wines for A.Y. 2016-17, cash book and bank book for the relevant year of Ahura Wines to justify the above. The submissions and details filed by the appellant firm have been verified and appears to be correct. Thus, the source of amount in the hands of proprietary firm of Mr. Noutwani for making capital contribution in Printed from counselvise.com ITA No.2151/PUN/2025 C.O. No.2/PUN/2026 9 the appellant firm stands explained. Accordingly, the action of the AO in making the addition is not warranted. 7.3.6 Dinesh Wines – (Cash of Rs. 1,10,00,000/- and Cheque of Rs. 89,80,000/-) The appellant produced the cash book, ledger etc. of Dinesh Wines in the course of appellate proceeding and the same was examined by the AO in the course of submitting the remand report. The AO has confirmed that the said transactions are duly reflected in the books of the concerned. The AO has further stated that there are no entries for cash withdrawal corresponding to the amount of Rs.1,10,00,000/- in the books and there is a cash deposit of Rs. 30,00,000/- on 10.11.2016, Rs.20,00,000/- on 11.11.2016 before issuing the cheque to the appellant firm. The AO has also confirmed that there is transfer of funds of different amounts by way of cheques from Raj Wines, Krish Wines etc. subsequently leading to issue of cheques to the appellant firm as capital contribution shortly thereafter. The receipt of funds from Raj Wines is found duly explained as per the books of Raj Wines, Krish Wines and the only question that remains to be decided is whether the partner had sufficient cash in the books of Dinesh Wines to explain the source of cash transfer of Rs. 1,10,00,000/- . The appellant has submitted that Dinesh Wines was running a retail liquor shop till the FY 2015-16, having most of the sales in cash and as per the audited books of M/s Dinesh Wines, it had closing cash in hand Rs. 15,88,668/- and sundry debtors of Rs. 3,15,25,454/- , which becomes the opening cash balance for the FY 2016-17. Further, the appellant has furnished books to explain further collection from the debtors in addition to the opening cash balance, which explains the cash component of the transfers made to the appellant firm. Thus, the said figures are more than sufficient to explain the source of capital contribution which Mr Noutwani had withdrawn such amount from Dinesh Wines during the relevant year and deposited into the appellant firm being capital contribution in cash and through cheques after depositing the cash into bank account. It is also observed that Dinesh Wines had received Rs. 12,00,000/- on 01.12.2016 from M/s Raj Wines, Rs. 10,00,000/- on 01.12.2016 and Rs. 18,00,000/- on 19.12.2016 from M/s Krish Wines and given the same amounts to appellant firm. Mr. Noutwani is also in partner in M/s Raj Wines & Krish Wines and the amount received by Dinesh Wines (one of the proprietary firms of Mr. Noutwani) from M/s Raj Wines and Krish Wines was on account of unsecured loans. The appellant has furnished the copy of audited balance sheet of Dinesh Wines for A.Y. 2016-17, cash book and bank book for the relevant year of Dinesh Wines to justify the above. The submissions and details Printed from counselvise.com ITA No.2151/PUN/2025 C.O. No.2/PUN/2026 10 filed by the appellant firm have been verified and appears to be correct. Thus, the source of amount in the hands of proprietary firm of Mr. Noutwani for making capital contribution in the appellant firm stands explained. Accordingly, the action of the AO in making the addition is not warranted. 7.3.7 Erandol wines – (Cash of Rs. 36,00,000/-) The appellant produced the cash book, ledger etc. of Erandol Wines in the course of appellate proceeding and the same was examined by the AO in the course of submitting the remand report. The AO has confirmed that the said transactions are duly reflected in the books of the concerned. The AO has further stated that there are no entries for cash withdrawal corresponding to the amount of Rs.36,00,000/- in the books and the only question that remains to be decided is whether the partner had sufficient cash in the books of Erandol Wines to explain the source of cash transfer of Rs.36,00,000/- . The appellant has submitted that Erandol Wines was running a retail liquor shop till the FY 2015-16, having most of the sales in cash and as per the audited books of M/s Erandol Wines, it had closing cash and bank balance of Rs. 37,04,185/-, which becomes the opening balance for the FY 2016-17, which is sufficient to explains the transfers made to the appellant firm. Thus, the said figures are more than sufficient to explain the source of capital contribution which Mr Noutwani had withdrawn such amount from Erandol Wines during the relevant year and deposited into the appellant firm being capital contribution in cash. The appellant has furnished the copy of audited balance sheet of Erandol Wines for A.Y. 2016-17 and cash book for the relevant year of Erandol Wines to justify the above. The submissions and details filed by the appellant firm have been verified and appears to be correct. Thus, the source of amount in the hands of proprietary firm of Mr. Noutwani for making capital contribution in the appellant firm stands explained. Accordingly, the action of the AO in making the addition is not warranted. 7.3.8 N N Wines (R S Noutwani) – (Cash of Rs. 26,706/- and Cheque of Rs. 11,71,075/-) The appellant produced the cash book, ledger etc. of N N Wines in the course of appellate proceeding and the same was examined by the AO in the course of submitting the remand report. The AO has confirmed that the said transactions are duly reflected in the books of the concerned. The AO has further confirmed that there are cash entries of Rs.26,706/- and cheque deposit of different amounts before issuing the cheque to the appellant firm. The appellant has submitted that N N Wines was running a retail liquor shop having most of the Printed from counselvise.com ITA No.2151/PUN/2025 C.O. No.2/PUN/2026 11 sales in cash and as per audited books of M/s N N Wines, for FY 2016-17 it had opening cash in hand Rs. 9,81,405/- and the turnover of such firm was Rs. 5,87,28,926/- relevant to the AY 2017-18. The above figures are more than sufficient to explain the source of capital contribution which Mr Noutwani had withdrawn such amount from N N Wines during the relevant year and deposited into the appellant firm being capital contribution. The appellant has furnished the copy of audited balance sheet of NN Wines for A.Y. 2017- 18, cash book and bank book for the relevant year to justify the above. The submissions and details filed by the appellant firm have been verified and appears to be correct. Thus, the source of amount in the hands of proprietary firm of Mr. Noutwani for making capital contribution in the appellant firm stands explained. Accordingly, the action of the AO in making the addition is not warranted. 7.3.9 It is observed from the perusal of remand report, documents produced in the course of appellate proceedings that the source of cash in the hands of proprietary firms was mainly on account of cash sales and recovery from outstanding debtors. It is noticed that Mr. Noutwani had made the capital contribution of Rs. 41,75,000/- through Vaspan Wines, Rs. 1,99,80,000/- through Dinesh Wines, Rs. 120,30,000/- through Ahura Wine, Rs. 36,00,000/- through Erandol Wines, Rs. 12,59,000/- through Jamner Wines and Rs. 11,97,781/- through N.N. Wines. 7.3.10 It is a matter of fact that the sales are generally made in cash in liquor business. Thus, the source of amount contributed by Mr. Raj Kumar S. Noutwani as partner’s capital in appellant firm is justified and the addition made by the AO is not maintainable. Accordingly, the addition of Rs. 4,22,41,781/- is hereby deleted and Ground No. 2 is allowed. 7.4 Ground No. 3:- The assessing officer has made the addition of Rs. 9,61,850/- on account of cash deposited by the appellant in its bank account during demonetization period. The assessing officer observed that appellant had deposited Rs.39,97,500/- during demonetization period, whereas the cash in hand balance as on 08.11.2016 was Rs. 30,35,650 and made the addition of Rs.9,61,850/- (Rs. 39,97,500 (-) Rs. 30,35,650). The Remand Report was called for. The assessing officer has verified in the remand report and categorically stated that the appellant had deposited only Rs.31,58,500/- in demonetized currency notes during the demonetization period and it had cash in hand balance of Rs.30,35,650/- as on 08.11.2016. Accordingly, the addition of Rs.1,22,850 (Rs.31,58,500- Rs.30,35,650) is sustained out of the total addition of Rs.9,61,850/-. Ground number 3 is partly allowed.” Printed from counselvise.com ITA No.2151/PUN/2025 C.O. No.2/PUN/2026 12 8. From the perusal of above order of Ld. CIT(A)/NFAC, we find that Ld. CIT(A)/NFAC has allowed the appeal of the assessee by relying on the judgement passed by Hon’ble Gujarat High Court, against which SLP filed by the Revenue was also dismissed by Hon’ble Supreme Court, in the case of PCIT Vs Vaishno Devi Refills & Solvex (Tax Appeal No. 846 of 2017), wherein while dismissing the appeal of the Revenue Hon’ble High Court observed that :- “when the appellant has furnished the details with regard to the source of the capital introduced in the firm and the concerned partner had confirmed such contribution, the appellant had duly discharged the onus cast upon it. Thereafter, if the Assessing Officer was not convinced about the creditworthiness of the partner who had made the capital contribution, the inquiry had to be made at the end of the partner and not against the firm.” 9. Accordingly, we do not find any error in the order passed by Ld. CIT(A)/NFAC wherein the addition of Rs.4,22,41,781/- and addition of Rs.8,39,000/- was deleted after considering the remand report furnished by the Assessing Officer and also by relying on judgement of Hon’ble Gujarat High Court (supra). Thus, the grounds of appeal raised by the Revenue are dismissed. 10. In the result, the appeal filed by the Revenue in ITA No.2151/PUN/2025 is dismissed. Printed from counselvise.com ITA No.2151/PUN/2025 C.O. No.2/PUN/2026 13 C.O. No.2/PUN/2026, By Assessee : 11. Since the appeal of the Revenue is already dismissed, the cross objection filed by the assessee becomes infructuous hence dismissed. 12. To sum up, the appeal filed by the Revenue as well as the cross objection filed by the assessee are dismissed. Order pronounced on this 27th day of March, 2026. Sd/- Sd/- (R. K. PANDA) (VINAY BHAMORE) VICE PRESIDENT JUDICIAL MEMBER पुणे / Pune; ᳰदनांक / Dated : 27th March, 2026. Sujeet/DOC आदेश कᳱ ᮧितिलिप अᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The Pr. CIT concerned. 4. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, “A” बᱶच, पुणे / DR, ITAT, “A” Bench, Pune. 5. गाडᭅ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Assistant Registrar आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune. Printed from counselvise.com "