CARPET & TEXTILE HOUSE, Jaipur V. DCIT, Jaipur

ITA 41/JPR/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2092 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 28-04-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 15-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJENDRA SINGH CIT DHK
• Keywords: Unexplained cash credit; Question of law
• Section: 68; 69

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH HKKXPAN] YS[KK LNL; ,OA JH DQY HKKJR ] U;KF;D LNL; DS LE{K BEFORE: SHRI BHAGCHAND, AM & SHRI KUL BHARAT, JM VK;DJ VIHY LA-@ ITA NO. 41/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2007-08 M/S CARPET & TEXTILE HOUSE, 1, NATWARA HOUSE, SUBHASH CHOWK, OLD AMER ROAD, JAIPUR. CUKE VS. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-5, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAFFC 0125 P VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAJENDRA SINGH (ADDL.CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 17/05/2017 MN?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 19/05/2017 VKNS'K@ ORDER PER: BHAGCHAND, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE EMANATES FR OM THE ORDER DATED 14/11/2014 PASSED BY THE LD CIT(A)-II, JAIPUR FOR T HE A.Y. 2007-08, WHEREIN THE ASSESSEE HAS RAISED SOLE EFFECTIVE GROUND, WHICH IS AGAINST MAKING THE ADDITION OF RS. 2,19,97,125/- IN THE HANDS OF THE A SSESSEES FIRM U/S 68 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) ON ACCOU NT OF CAPITAL INTRODUCTION ON ACCOUNT OF STOCK. ITA 41/JP/2015_ M/S CARPET & TEXTILE HOUSE VS DCIT 2 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM WHEREIN SHRI MAHESH KUMAR DANGAYACH AND RAJNI KHANDE LWAL WERE PARTNERS AND THE FIRM WAS ENGAGED IN THE BUSINESS OF CARPETS, DURRIUS, HANDICRAFTS ITEMS ETC. PRIOR TO THE CONSTITUTION OF THE ASSESSE E FIRM, SHRI MAHESH DANGAYACH WAS PARTNER IN M/S ANIL EXPORTS AND M/S AN IL RUGS. BOTH THESE FIRMS WERE ALSO ENGAGED IN THE BUSINESS OF CARPETS, DURRIUS, HANDICRAFTS ITEMS ETC. IT WAS CLAIMED THAT SHRI MAHESH DANGAYACH INTRODUCED STOCK OF RS. 2,19,97,125/- ON 01/4/2006 AND THIS STOCK WAS TA KEN OVER FROM THE FIRM M/S ANIL EXPORTS AND M/S ANIL RUGS AS HIS CAPITAL C ONTRIBUTION IN THE ASSESSEE FIRM. IN THE FIRST ROUND OF APPEAL, THE MA TTER TRAVELLED TO THE LEVEL OF ITAT AND THE HONBLE ITAT IN ITS ORDER DATED 02/0 9/2011 SET ASIDE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER BY MAKIN G FOLLOWING OBSERVATIONS: 'NOW THE QUESTION REMAINS THAT WHETHER THIS CAN HE ADDED IN THE HANDS OF THE FIRM OR NOT. SINCE THERE IS CONTRADICTORY STAND TAKEN AT DI FFERENT TIMES HERE BEFORE THE TRIBUNAL AND IT IS DIFFICULT TO HOLD THAT WHETHER THE STOCK, IN FACT, TRANSFERRED BELONGING TO THE PARTNERS OR SOMEBODY ELSE, ONUS IS ON THE FIRM. FIR M IS NOT A PERSON AS IT IS AN ARTIFICIAL ENTITY, THEREFORE, THIS FACT HAS TO BE VERIFIED FRO M WHICH SOURCE THIS STOCK HAS COME IN THE BOOKS OF ACCOUNT OF THE ASSESSEE FIRM. TO ASCER TAIN THIS FACT, MATTER IS RESTORED TO THE FILE OF THE AO TO GIVE AN OPPORTUNITY TO THE AS SESSEE TO FILE EVIDENCES IN RESPECT OF THE CAPITAL IN SHAPE OF STOCK INTRODUCED IN THE BOO KS OF ACCOUNTS OF THE FIRM. IF THE AO HOLDS THAT THIS STOCK WAS TRANSFERRED BY THE PARTNE RS AND THIS WAS THE FIRST DAY OF STARTING OF THE PARTNERSHIP BUSINESS AND NO ADDITIO N CAN BE MADE IN THE HANDS OF THE FIRM, THEN THE AO CAN MAKE ADDITION IN THE HANDS OF THE PARTNER BY TAKING RECOURSE OF PROVISIONS OF LAW. IT IS WORTH MENTIONING HERE THAT THE DECISION OF HONBLE RAJASTHAN HIGH COURT IN THE CASE OF KEWAL KRISHAN & PARTNER ( SUPRA) BY WHICH IT HAS BEEN HELD THAT IF CAPITAL IS INTRODUCED ON 1 ST DAY OF THE BUSINESS OF THE FIRM, THEN NO ADDITION CAN BE MADE IN THE HANDS OF THE FIRM BUT ADDITION CAN BE M ADE IN THE HANDS OF THE PARTNER IN WHOSE NAME THE CAPITAL IS INTRODUCED. THIS FACTOR H AS TO BE TAKEN INTO CONSIDERATION BY THE AO WHILE DECIDING THE ISSUE AFRESH AS STATED AB OVE. ACCORDINGLY WE SET ASIDE THIS ITA 41/JP/2015_ M/S CARPET & TEXTILE HOUSE VS DCIT 3 ISSUE TO THE FILE OF AO TO EXAMINE IN THE LIGHT OF THE OBSERVATION OF OURS ABOVE AND PASS A FRESH ORDER AFTER AFFORDING A REASONABLE OPPORTUN ITY TO THE ASSESSEE. 3. BEFORE US, IT WAS SUBMITTED THAT THE HONBLE ITAT SET ASIDE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING T WO ISSUES (I) TO VERIFY FROM WHICH SOURCE STOCK HAS COME IN THE BOOKS OF ACCOUNT OF THE ASSESSEE FIRM AND (II) IF IT IS HELD THAT THE STOCK WAS TRANSFERRE D BY THE PARTNERS AND THIS WAS THE FIRST DAY OF THE STARTING OF THE PARTNERSHIP BUSINESS THEN NO ADDITION CAN BE MADE IN THE HANDS OF THE FIRM, THEN THE ASSE SSING OFFICER CAN MADE THE ADDITION IN THE HANDS OF THE PARTNER BY TAKING RECOURSE OF THE PROVISION OF THE LAW. 3.1 IN THE SECOND ROUND OF APPEAL, THE ASSESSING OF FICER MADE ADDITION AGAIN BY HOLDING THAT THE ASSESSEE HAS FAILED TO FI LE ANY DOCUMENTARY EVIDENCE LIKE BALANCE SHEET FOR A.Y. 2006-07 OF THE ERSTWHILE FIRMS OR THE DISSOLUTION DEED OF THE ERSTWHILE FIRMS OR ANY AGREE MENT WITH THE PARTNERS OF ERSTWHILE FIRM AND FAILED TO PRODUCE THE OTHER P ARTNERS OF THE ERSTWHILE FIRMS TO SUBSTANTIATE THAT SHRI MAHESH DANGAYACH HA S INTRODUCED THE STOCK IN THE ASSESSEE FIRM AS CAPITAL CONTRIBUTION FROM H IS SIDE. IT WAS SUBMITTED THAT THE STOCK OF RS. 2,19,97,125/- WAS CREDITED TO THE ACCOUNT OF THE ASSESSEE BY DEBITING THE OPENING STOCK AS ON 01/4/2 006. IN THE FORM A FURNISHED TO THE COMMERCIAL TAX DEPARTMENT FOR THE F .Y. 2006-07, THIS AMOUNT WAS DECLARED AS OPENING STOCK AND ON THAT BAS IS THE COMMERCIAL ITA 41/JP/2015_ M/S CARPET & TEXTILE HOUSE VS DCIT 4 TAX DEPARTMENT HAS ASSESSED THE ASSESSEE FIRM. THE F IRMS FROM WHERE PARTNER SHRI MAHESH DANGAYACH ACQUIRED THESE STOCKS WERE HOLDING THE STOCK AT THE END OF THE YEAR FOR WHICH THE TRADING A CCOUNT OF THESE FIRMS WERE PLACED IN THE PAPER BOOK AT PAGE NO. 9 AND 23. IT WAS ALSO SUBMITTED THAT M/S ANIL EXPORTS HAS FILED ITS RETURN OF INCOM E FOR A.Y. 2006-07 RELEVANT TO F.Y. 2005-06 WHEREIN THE CLOSING STOCK DECLARED WAS RS. 1,65,53,880 AND EXPORT SALE OF RS. 2,45,12,362/-. THIS FACT HAS BEEN ACCEPTED BY THE COMMERCIAL TAXES DEPARTMENT. SIMILARLY IN THE CASE O F M/S ANIL RUGS, THE RETURN OF INCOME WAS FILED AND THE CLOSING STOCK WAS OF RS. 55,43,245/- AND SALES WERE RS. 3,50,93,714/-. THESE SALES WERE ACCEPTE D BY THE COMMERCIAL TAXES DEPARTMENT. NO BUSINESS WAS CONDUCTED BY THESE TWO FIRMS FROM 01/4/2006 ONWARDS, THEREFORE, NO RETURN OF INCOME WAS FILED. THE PARTNER SHRI MAHESH DANGAYACH TOOK OVER THE STOCK OF THESE TWO FIRMS AND CONTRIBUTED AS HIS CAPITAL CONTRIBUTION TO THE ASSE SSEE FIRM AS ON 01/4/2006. IT WAS SUBMITTED THAT SECTION 29 OF THE INDIAN PARTN ERSHIP ACT, 1932 PROVIDES THAT IF THE FIRM IS DISSOLVED OR IF THE TR ANSFERRING PARTNER CEASES TO BE A PARTNER, THE TRANSFEREE IS ENTITLED AS AGAINST THE REMAINING PARTNERS TO RECEIVE THE SHARE OF THE ASSET OF THE FIRM TO WHICH THE TRANSFERRING PARTNER IS ENTITLED. IN M/S ANIL EXPORT, THE CAPITAL OF SHRI M AHESH DANGAYACH WAS RS. 87,17,054/- WHEREAS THE CAPITAL OF OTHER PARTNER WAS OF RS. 14,30,605/- AS ON 31/3/2005. IN M/S ANIL RUGS, THE CAPITAL OF SHRI MAHESH DANGAYACH WAS ITA 41/JP/2015_ M/S CARPET & TEXTILE HOUSE VS DCIT 5 RS. 28,15,450/- WHEREAS THE CAPITAL OF OTHER PARTNE R WAS OF RS. 26,50,270/- AS ON 31/3/2005. SHRI MAHESH DANGAYACH AND HIS WIFE HAVE PAID RS. 25.00 LACS TO THE OTHER GROUP OF PARTNERS IN THESE TWO FIR MS. ALL THESE FACTS SUGGEST THAT SHRI MAHESH DANGAYACH TOOK OVER THE ST OCK OF THESE TWO FIRMS AND CONTRIBUTED IT AS HIS CAPITAL CONTRIBUTION AS O N 01/4/2006. IT WAS ALSO SUBMITTED THAT THE OBSERVATION REGARDING NOT FILING THE DISSOLUTION DEED BY THE LOWER AUTHORITIES AND FAILED TO PRODUCE THE PART NER OF ERSTWHILE FIRM IS NOT SO RELEVANT AS THERE WAS A DIFFERENCE AMONGST TH E PARTNERS OF ERSTWHILE FIRMS. THEREFORE, NEITHER DISSOLUTION DEED COULD BE EXECUTED NOR THESE PARTNERS COULD HAVE BEEN MADE REQUEST TO APPEAR BEF ORE THE ASSESSING OFFICER. HOWEVER, UNDER THESE CIRCUMSTANCES, THE ASS ESSING OFFICER WAS REQUESTED TO SUMMON THE OTHER PARTNERS OF THE ERSTWH ILE FIRM, WHICH IS EVIDENT FROM PB 54 LETTER DATED 11/2/2013. EVEN AFT ER SPECIFIC REQUEST, THE ASSESSING OFFICER KEPT SILENT, THEREFORE, SUCH OBSE RVATION MADE BY THE AUTHORITIES BELOW ARE BY IGNORING ALL THE OTHER EVID ENCES FILED BY THE ASSESSEE. IT WAS ALSO SUBMITTED THAT THE HONBLE ITA T HAS CLEARLY STATED IN ITS ORDER THAT IF THE CAPITAL IS INTRODUCED IN THE FIRST DAY OF THE BUSINESS OF THE FIRM, NO ADDITION CAN BE MADE IN THE HANDS OF T HE FIRM BUT THE ADDITION CAN BE MADE IN THE HANDS OF THE PARTNER IN WHOSE NAM E THE CAPITAL IS INTRODUCED. IT IS A FACT ON RECORD THAT THE PARTNER SHIP DEED OF THE ASSESSEE FIRM WAS EXECUTED ON 30/03/2006. NO BUSINESS WAS COND UCTED IN THE FIRM ITA 41/JP/2015_ M/S CARPET & TEXTILE HOUSE VS DCIT 6 PRIOR TO 01/4/2006 WHEN THE CAPITAL WAS INTRODUCED. THE FIRST PURCHASE WAS MADE ON 07/04/2006, WHICH IS EVIDENT FROM THE PURCHA SE REGISTER (PB89) AND THE FIRST SALE WAS MADE ON 14/04/2006, WHICH IS E VIDENT FROM THE SALES REGISTER (PB 90). THUS, WHEN THE STOCK WAS INTRODUCE D IN THE FIRM ON 01/4/2006, IT WAS PRIOR TO EXECUTION OF THE BUSINESS OF THE ASSESSEE FIRM BY PURCHASE OR BY SALE, THEREFORE, NO ADDITION IS ATTR ACTED U/S 68 OF THE ACT IN VIEW OF THE DECISION OF THE HONBLE RAJASTHAN HIGH C OURT IN THE CASE OF KEWAL KRISHAN & PARTNERS, WHICH HAS BEEN REFERRED BY THE HONBLE ITAT IN ITS ORDER WHILE SETTING ASIDE THE ISSUE. 4. ON THE OTHER HAND, THE LD. SR. DR HAS RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 5. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES ON THIS ISSUE. IN THE FIRST ROUND OF APPEAL, THE ITAT HAS CLEARLY GIVEN DIRECTION TO VERIFY THE SOURCE FROM WHERE THE STOCK HAS COME IN THE BOOKS OF ACCOUNT OF THE ASSESSEE FIRM. FURTHER IF THE STOCK WAS TRANSFERRED BY THE PARTNER AND THIS WAS THE FIRST DAY OF STARTING OF THE PARTNERSHIP BUS INESS, THEN NO ADDITION WAS CALLED FOR IN THE HANDS OF THE ASSESSEE FIRM THE N THE ADDITION COULD HAVE BEEN MADE IN THE HANDS OF THE PARTNER, WHO HAD INTRODUCED THE STOCK AS HIS CAPITAL CONTRIBUTION. THE FACTS ON RECORD SHO WS THAT THE ASSESSEE HAS MADE FIRST SALE ON 14/4/2006, WHICH IS EVIDENT FROM THE SALES REGISTER PLACED AT PB 90 AND THE FIRST PURCHASE WAS MADE ON 07/4/200 6 WHICH IS EVIDENT ITA 41/JP/2015_ M/S CARPET & TEXTILE HOUSE VS DCIT 7 FROM PURCHASE REGISTER PLACED AT PB 89. THE FIRM WAS CONSTITUTED ON 30/3/2006 BUT THERE WAS BUSINESS CONDUCTED PRIOR TO 01/4/2006. THIS WAS THE DAY WHEN THE CAPITAL WAS CONTRIBUTED BY THE PART NERS TO THE ASSESSEE FIRM. 5.1 THEREFORE, IN OUR CONSIDERED VIEW, THE CAPITAL CO NTRIBUTION IN THE FORM OF STOCK IN TRADE IN THE BOOKS OF ACCOUNT OF THE AS SESSEE FIRM WAS ON THE FIRST DAY OF THE STARTING OF THE BUSINESS OF THE PA RTNERSHIP FIRM RATHER WE CAN SAY THAT THE BUSINESS STARTED WITH THE CAPITAL CONTR IBUTION BY THE PARTNER IN THE FORM OF STOCK. THEREFORE, IN VIEW OF THE DECISIO N OF THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. KEWAL KRI SHAN & PARTNERS (2009) 018 DTR 0121, THE ADDITION MADE AND SUSTAINED IN THE HANDS OF ASSESSEE WAS NOT JUSTIFIED. THE RELEVANT PARAGRAPH OF THE HON'BLE HIGH COURT DECISION IS AS UNDER:- 5. THE LEARNED TRIBUNAL HAS ARRIVED AT THE FINDIN G THAT THE CONTRIBUTION IN THE CAPITAL ACCOUNT MADE BY THE PAR TNERS PRIOR TO COMMENCEMENT OF THE BUSINESS CANNOT BE TREATED AS C ASH CREDIT AND CANNOT BE ADDED UNDER S. 68 IN THE HANDS OF THE ASSESSEE. THE LEARNED TRIBUNAL OPINED THAT THE CAPITAL CONTRI BUTIONS HAVE TO BE CONSIDERED IN THE HANDS OF INDIVIDUAL PARTNER AN D NOT IN THE HANDS OF ASSESSEE. 6. IT IS CONTENDED BY THE LEARNED COUNSEL FOR THE REVENUE THAT THE ASSESSEE HAVING FAILED TO DISCHARGE THE ONUS TO PRO VE THE GENUINENESS, CREDITWORTHINESS AND IDENTITY OF THE C REDITORS, THE UNEXPLAINED CASH CREDITS DESERVE TO BE ADDED TO THE INCOME OF THE ASSESSEE UNDER S. 68 OF THE ACT OF 1961. 7. IT IS NOT IN DISPUTE THAT THE MEMBERS OF THE AO P S/SHRI ALI MOHD. DEPOSITED RS. 5,00,000, AMARNATH DEPOSITED RS. 3,00 ,000 AND KEWAL KRISHAN DEPOSITED RS. 50,000 AS CAPITAL CONTR IBUTION ON THE ITA 41/JP/2015_ M/S CARPET & TEXTILE HOUSE VS DCIT 8 FIRST DAY OF COMMENCEMENT OF THE BUSINESS BY THE FI RM I.E., 1ST APRIL, 1989. ALL THE PARTNERS HAVE CONFIRMED THAT T HEY HAD INTRODUCED THOSE AMOUNTS AS THEIR CAPITAL CONTRIBUT ION. OBVIOUSLY, IT WAS FOR THE PARTNERS TO EXPLAIN THE SOURCE OF TH E DEPOSITS AND IF THEY FAILED TO DISCHARGE THE ONUS THEN, SUCH DEPOSI TS COULD BE ADDED IN THE HANDS OF THE PARTNERS ONLY AND NOT IN THE HANDS OF THE ASSESSEE FIRM. IN ANY CASE, SUCH CAPITAL CONTRI BUTIONS ENTERED INTO THE BOOKS OF ACCOUNTS OF THE ASSESSEE FIRM PRI OR TO THE COMMENCEMENT OF THE BUSINESS CANNOT BE TREATED TO B E THE INCOME OF THE ASSESSEE FIRM. IN CONSIDERED OPINION OF THIS COURT, SUCH UNEXPLAINED CREDITS MAY BE ADDED TO THE INCOME OF THE PARTNERS CONCERNED IN TERMS OF S. 69 AND NOT UNDER S. 68 OF THE ACT OF 1961. 8. FOR THE AFOREMENTIONED REASONS, IN OUR VIEW, NO SUBSTANTIAL QUESTION OF LAW ARISES OUT OF THE ORDER IMPUGNED PA SSED BY THE LEARNED TRIBUNAL FOR CONSIDERATION OF THIS COURT. SIMILAR VIEW WAS ALSO UPHELD BY THE HONBLE ANDHRA PR ADESH HIGH COURT IN THE CASE OF CIT VS. M. MENKATESHWARA RAO AND OTHERS ( 2015) 370 ITR 212 (T&AP). THE RELEVANT PORTION OF THE ORDER OF HON'BLE HIGH COURT IS AS UNDER:- HELD, DISMISSING THE APPEAL, (I) THAT THE AMOUNT T HAT WAS SOUGHT TO BE TREATED AS INCOME OF THE FIRM WAS THE CONTRIBUTION MADE BY THE PARTNERS TO THE CAPITAL. IN A WAY, THE AMOUNT SO CONTRIBUTED CONSTITUTES THE VERY SUBSTRATUM FOR THE BUSINESS OF THE FIRM. THE POOLING OF SUCH CAPITAL AS CREDIT. IT WAS ONLY WHEN THE ENTRIES WERE MADE DURING THE COURSE OF BUSINESS THAT THEY COULD BE SUBJECTED TO SCRUTINY UNDER SECTION 68 OF THE INCOME-TAX ACT, 1961. EVEN OTHERW ISE, IT WAS EVIDENT THAT THE ASSESSEE EXPLAINED THE AMOUNT OF RS. 76,57,263 AS THE CONTRIBUTION FROM ITS PARTNERS. IN SUCH A SITUATION, SECTION 68 COULD NO LONGER BE PRESSED INTO SERVICE. INQUIRY INTO THE SOURCE FOR THE RESPECTIVE PARTNERS TO MAKE THAT CONTRIBUTION COULD, AT THE MOST, BE CONDUCTED AGAINST THE INDIVIDUAL PA RTNERS. IF THE PARTNER WAS AN ASSESSEE, THE CONCERNED ASSESSING OFFICER CAN REQUI RE HIM TO EXPLAIN THE SOURCE OF THE MONEY CONTRIBUTED BY HIM TO THE FIRM. IF, ON TH E OTHER HAND, THE PARTNER WAS NOT AN ASSESSEE, HE CAN BE REQUIRED TO FILE A RETUR N AND EXPLAIN THE SOURCE. UNDERTAKING SUCH AN EXERCISE, VIS-A-VIS THE FIRM IT SELF, WAS IMPERMISSIBLE IN LAW. THEREFORE, THE VIEW TAKEN BY THE ASSESSING OFFICER THAT THE FIRM MUST EXPLAIN THE SOURCE OF INCOME FOR THE PARTNERS REGARDING THE AMO UNT CONTRIBUTED BY THEM TOWARDS CAPITAL OF THE FIRM COULD NOT BE SUSTAINED IN LAW. CIT V. ANUPAM UDYOG [1983] 142 ITR 133 (PATNA) FOLLOWED. ITA 41/JP/2015_ M/S CARPET & TEXTILE HOUSE VS DCIT 9 (II) THAT AS REGARDS THE UNEXPLAINED CREDIT ENTRIES , THE TRIBUNAL TOOK THE VIEW THAT THE AMOUNT REPRESENTED THE SECURITY DEPOSITS MADE B Y THE RETAIL DEALERS AND THE SOURCE THEREOF WAS PROPERLY EXPLAINED. NOWHERE IN T HE ORDER OF ASSESSMENT, HAD THE ASSESSING OFFICER RECORDED ANY FINDING TO THE E FFECT THAT HE HAD VERIFIED THE MATTER FROM THE RESPECTIVE RETAIL DEALERS AND THAT SUCH DEALERS HAD DENIED MAKING DEPOSITS. IN THE FIELD OF ARRACK BUSINESS UNDERTAKE N BY ASSESSEE, IT WAS NOT UNCOMMON THAT THE RETAIL DEALERS WERE REQUIRED TO K EEP SECURITY DEPOSITS WITH THE SUPPLIER. AT ANY RATE, IT WAS A PURE QUESTION OF FA CT. IN VIEW OF THE FACT THAT THE PARTNER HIMSELF HAS AFF IRMED THAT HE HAS MADE CAPITAL CONTRIBUTION, THE CONTRIBUTION WAS MADE ON THE FIRST DAY OF THE COMMENCEMENT OF THE BUSINESS, THEREFORE, IN OUR CON SIDERED VIEW, THE ADDITION IN THE HANDS OF THE FIRM COULD NOT BE SUST AINED, HENCE, WE DIRECT THE ASSESSING OFFICER TO DELETE THE SAME. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 19/05/2017. SD/- SD/- DQY HKKJR HKKXPAN (KUL BHARAT) (BHAGCHAND) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 19 TH MAY, 2017 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- M/S CARPET & TEXTILE HOUSE, JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- THE DCIT, CIRCLE-5, JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 41/JP/2015) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR