M/s Bhavani Hire Purchase & Finance, Warangal V. ITO, Karimnagar

ITA 1333/HYD/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 66433 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-11-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 22-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMISHA S GUPT
• Assessee Lawyers: C P RAMASWAMY
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER I.T.A. NO. 1333/HYD/2010 ASSESSMENT YEAR 2006-07 M/S. BHAVANI HIRE PURCHASE & FINANCE, KARIMNAGAR PAN: AAEFB6152E VS. THE INCOME-TAX OFFICER WARD-4 KARIMNAGAR APPELLANT RESPONDENT APPELLANT BY: SRI C.P. RAMA SWAMY RESPONDENT BY: SMT. AMISHA S. GUPT DATE OF HEARING: 01.11.2012 DATE OF PRONOUNCEMENT: 07.11.2012 O R D E R PER CHANDRA POOJARI, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE CIT(A)-III, HYDERABAD 12.8.2010. 2. THE ONLY GRIEVANCE OF THE ASSESSEE IN THIS APPEAL I S WITH REGARD TO SUSTAINING AN ADDITION OF RS. 6 LAKHS WHICH REFLECT S THE CAPITAL INTRODUCTION BY ONE OF THE PARTNERS OF THE FIRM VIZ ., T. ANUSHA. 3. THE LEARNED AR SUBMITTED THAT THE ABOVE RS. 6 LAKHS REPRESENTED THE CAPITAL CONTRIBUTION BY THE PARTNER VIZ., T. AN USHA AND SHE IS AN INCOME-TAX ASSESSEE AND SHE ALSO CONFIRMED THE INTR ODUCTION OF CAPITAL BY AN AFFIDAVIT. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIAL ON RECORD. IN OUR OPINION THE AFFIDAVIT MADE BY T. AN USHA ITSELF IS NOT ENOUGH TO DELETE THE ADDITION MADE IN THE HANDS OF THE FIR M. UNDER SECTION 68 OF THE ACT, THE ONUS IS ON THE ASSESSEE, IN WHOSE BOOK S CASH CREDIT APPEARS, TO EXPLAIN THE NATURE AND SOURCES OF SUCH CREDIT IN A SATISFACTORY MANNER. THE FIRM HAS TO PROVE THE CAPACITY OF THE PARTNER C ONCERNED TO CONTRIBUTE ITA NO. 1333/HYD/2010 M/S. BHAVANI HIRE PURCHASE & FINANCE ============================== 2 THE AMOUNT IN QUESTION AND ALSO GENUINENESS OF THE TRANSACTION. HENCE, IN THE CASE OF THE FIRM WHEN THERE IS NO SATISFACTORY EXPLANATION REGARDING THE CREDIT APPEARING THE CAPITAL ACCOUNT OF THE PAR TNER, OR THE EXPLANATION OFFERED IS NOT SUPPORTED BY ADEQUATE EVIDENCE, SUCH CREDIT HAS TO BE CHARGED TO TAX U/S. 68 OF THE ACT AS INCOME OF THE ASSESSEE AND IT CANNOT BE SAID THAT SUCH CASH CREDIT SHOULD BE CONSIDERED ONLY IN THE HANDS OF THE RESPECTIVE PARTNERS FOR THE REASON THAT THE PARTNER S ARE NOT PROVED TO HAVE OWNED THE FUNDS SO CREDITED. HOWEVER, IN SOME CASES IT HAS BEEN HELD THAT ONCE IT IS FOUND AS A FACT THAT CASH WAS RECEIVED BY THE FIRM FROM ITS PARTNERS, THEN, THE RELEVANT CASH CREDIT COULD NOT BE ASSESSED U/S. 68 OF THE ACT IN THE HANDS OF THE FIRM IN THE ABSENCE OF EVIDENCE TO INDICATE THAT THE CASH CREDIT REPRESENTS THE FIRM'S PROFIT AND TH E FIRM IS NOT FURTHER REQUIRED TO EXPLAIN THE SOURCE OF DEPOSITS IN THE H ANDS OF THE PARTNER. 5. IN OUR OPINION THIS VIEW DOES NOT APPEAR TO BE CORR ECT VIEW IN ACCORDANCE WITH THE PROVISIONS OF SECTION 68 OF THE ACT. BEING SO, WE WILL REMIT THIS ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO THE ASSESSEE TO PLACE NECESSARY EVIDENCE REGARDING THE CAPACITY OF THE PARTNER T. ANUSHA TO INTRODUCE THE AMOUNT OF RS. 6 LAKHS IN THE FIRM AS HER CAPITAL. ACCORDINGLY, THE ASSESSING OFFICER IS DIR ECTED TO RE-EXAMINE THE ISSUE AFRESH. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FO R STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH NOVEMBER, 2012. SD/- (SAKTIJIT DEY) JUDICIAL MEMBER SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD, DATED 7 TH NOVEMBER, 2012 TPRAO ITA NO. 1333/HYD/2010 M/S. BHAVANI HIRE PURCHASE & FINANCE ============================== 3 COPY FORWARDED TO: 1. M/S. BHAVANI HIRE PURCHASE & FINANCE, C/O. M/S. G.S. MADHAVA RAO & CO., CHARTERED ACCOUNTANTS, H. NO. 11-26-54, SUDH AMA BUILDING, M.G. ROAD, WARANGAL-12. 2. THE INCOME-TAX OFFICER, WARD-4, KARIMNAGAR. 3. THE CIT(A)-III, HYDERABAD. 4. THE CIT-2, HYDERABAD. 5. THE DR B BENCH, ITAT, HYDERABAD