SHIVAM IMPEX, MUMBAI V. DCIT CIR. 2, THANE, THANE

ITA 5250/MUM/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9834 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2004-2005
• Appeal Filed On: 23-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN KUMAR LD
• Assessee Lawyers: KEYURI DESA I LD
• Keywords: Unexplained cash credit; Gift; Source of fund
• Section: 143(3); 68

Judgement Text

ITA NO 5250/MUM/2016 SHIVAM IMPEX ASSESSMENT YEAR 2004-05 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI . . , , BEFORE SHRI D.T. GARASIA, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO. 5250/MUM/2016 ( / ASSESSMENT YEAR: 2004-05) SHIVAM IMPEX 603,KRISHNA HEIGHTS C WING, UPPER GOVIND NAGAR, MALAD(E) MUMBAI 400 097 / VS. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-2 VARDAAN, 9 TH FLOOR, MIDC, WAGLE INDUSTRIAL ESTATE THANE ! ./ ./PAN/GIR NO. AANFS-1671-C ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) ASSESSEE BY : KEYURI DESAI, LD. AR REVENUE BY : SUMAN KUMAR, LD. DR / DATE OF HEARING : 17/08/2017 / DATE OF PRONOUNCEMENT : 23 /08/2017 ITA NO 5250/MUM/2016 SHIVAM IMPEX ASSESSMENT YEAR 2004-05 2 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY ASSESSEE FOR ASSESSMENT YEAR [AY] 2004-05 ASSAILS THE ORDER OF LD. COMMISSIONER OF IN COME TAX (APPEALS)-1 [CIT(A)], MUMBAI DATED 23/05/2016 QUA CONFIRMATION OF CERTAIN ADDITION OF RS.7.20 LACS ON ACCOUNT OF ALLEGED UNACCOUNTED CAPITAL INTRODUCED BY THE PARTNERS OF THE FIRM. THE ASSESSEE IS IN SECOND ROUND OF APPEAL BEFORE US. 2. FACTS LEADING TO THE SAME ARE THAT THE ASSESSEE BEING RESIDENT FIRM WAS ASSESSED U/S 143(3) FOR IMPUGNED AY ON 29/12/20 16 WHERE THE INCOME OF THE ASSESSEE WAS DETERMINED AT RS.15,37,4 50/- AFTER CERTAIN ADDITIONS / DISALLOWANCES AS AGAINST RETURNED INCOM E OF RS.6,17,450/- FILED BY THE ASSESSEE ON 30/10/2004. THE SUBJECT MA TTER OF THE APPEAL IS ADDITION OF RS.7.20 LACS, BEING ALLEGED UNACCOUNTED CAPITAL INTRODUCED BY THE PARTNERS OF THE FIRM. 3. DURING ASSESSMENT PROCEEDINGS, IT WAS NOTICED TH AT THE TWO PARTNERS OF THE FIRM INTRODUCED CAPITAL AGGREGATING RS.12.20 LACS IN THE FIRM, WHICH WAS STATED TO BE MADE OUT OF GIFTS RECE IVED BY THE PARTNERS FROM FOUR PERSONS. HOWEVER AFTER PERUSAL OF GIFT DE EDS AND STATEMENTS MADE BY TWO DONORS, LD. AO CAME TO A CONCLUSION THA T AN AMOUNT OF RS.7.20 LACS REMAINED UNEXPLAINED WHICH CALLED FOR ADDITION AS UNEXPLAINED CAPITAL INTRODUCED BY THE PARTNERS AND ACCORDINGLY, THE INCOME OF THE ASSESSEE WAS DETERMINED AFTER MAKING THE IMPUGNED ITA NO 5250/MUM/2016 SHIVAM IMPEX ASSESSMENT YEAR 2004-05 3 ADDITION. THE SAME, UPON CONFIRMATION BY LD. CIT(A) WAS CONTESTED BEFORE THIS TRIBUNAL VIDE ITA NO. 2813/MUM/2011 ORD ER DATED 18/07/2012 WHERE THE MATTER WAS RESTORED BACK TO LD . CIT(A) FOR FRESH ADJUDICATION. 4. BEFORE LD.CIT(A), IN THE SECOND ROUND, THE ASSE SSEE CONTENDED THAT THE PRIMARY ONUS OF PROVING THE SOURCE OF CAPI TAL WAS DISCHARGED BY THE ASSESSEE FIRM AND EVEN TWO DONORS WERE PRODUCED BEFORE LD. AO WITH THEIR BANK STATEMENT AND THEREFORE, THE ADDITI ONS WERE NOT JUSTIFIED. HOWEVER, NOT CONVINCED WITH THE EXPLANATION, LD.CIT (A) CONFIRMED THE ADDITION, AGAINST WHICH THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 5. THE LD. REPRESENTATIVE FOR ASSESSEE [AR] TAKING THE SAME STAND REITERATED THAT THE ASSESSEE, BEING A PARTNERSHIP FIRM , RECEIVED CAPITAL CONTRIBUTION FROM TWO PARTNERS WHICH IS NOT UNDER D ISPUTE. THE PARTNERS, IN TURN, HAVE INTRODUCED THE CAPITAL OUT OF GIFTS R ECEIVED BY THEM FROM SEVERAL DONORS. TO SUBSTANTIATE THE SAME, TWO DONOR S WERE PRODUCED BEFORE LD. AO WITH THEIR BANK STATEMENTS. NEVERTHEL ESS, THE SOURCE OF FUNDS RECEIVED BY THE ASSESSEE FIRM WAS CAPITAL CONTRIBUTION BY PARTNERS AND NOT THE GIFTS AND THE ASSESSEE WAS NOT EXPECTED TO PROVE THE SOURCE OF SOURCE. THEREFORE, THE ADDITION ON THIS ACCOUNT, IF ANY, WH ICH WAS TO BE MADE, COULD BE MADE IN THE HANDS OF THE RESPECTI VE PARTNERS AND NOT IN THE HANDS OF THE ASSESSEE FIRM. RELIANCE HAS BEE N PLACED ON THE JUDGMENT OF HONBLE ALLAHABAD HIGH COURT RENDERED I N ZAFA AHMAD & CO. VS. CIT [30 TAXMANN.COM 267] & ABHYUDAYA PHARMACEUTICALS V. COMMISSIONER OF INCOME-TAX [32 TAXMANN.COM 68]. PER CONTRA, LD. DR PLACED RELIANCE ON THE STAND OF LOWER AUTHORITIES. ITA NO 5250/MUM/2016 SHIVAM IMPEX ASSESSMENT YEAR 2004-05 4 6. HEARD AND PERUSED THE RELEVANT MATERIAL ON RECOR D INCLUDING CITED CASE LAWS. WE FIND THAT THE ASSESSEE IS A PARTNERSH IP FIRM AND RECEIVED CAPITAL CONTRIBUTION FROM THE PARTNERS DURING THE I MPUGNED AY WHICH IS NOWHERE DISPUTED BY THE REVENUE. THE SOURCE OF FUND S RECEIVED BY THE ASSESSEE FIRM IS CAPITAL CONTRIBUTION AND NOT GIFTS. THE ASSESSEE HAS BEEN ASKED TO SUBSTANTIATE THE SOURCE OF SOURCE, AG AINST WHICH THE ASSESSEE HAD ALREADY PRODUCED TWO DONORS WITH THEIR BANK STATEMENTS. THE GIFTS ARE RECEIVED BY THE PARTNERS WHO ARE SEPA RATE INCOME TAX ENTITIES AS DISTINCT FROM THE ASSESSEE FIRM AND THE REFORE, THE ADDITION FOR UNACCOUNTED / UNEXPLAINED MONEY, IF ANY, WHICH WAS TO BE MADE, COULD BE MADE IN THE HANDS OF THE RESPECTIVE PARTNERS ONL Y AND NOT IN THE HANDS OF THE ASSESSEE FIRM, SINCE THE ASSESSEE FIRM , AT THE RELEVANT TIME, WAS NOT REQUIRED TO DO SO IN VIEW OF THE STAT UTORY PROVISIONS AS CONTAINED IN SECTION 68. 7. OUR ABOVE VIEW IS FORTIFIED BY THE CITED JUDGMEN TS OF HONBLE ALLAHABAD HIGH COURT. THE RELEVANT FINDINGS IN THE CASE OF ZAFA AHMAD & CO. VS. CIT [30 TAXMANN.COM 267] ARE EXTRACTED BELOW:- 8. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO THE VARIOUS PLEAS RAISED BY THE LEARNED COUNSEL FOR THE PARTIES. WE FIND THAT IT IS NOT IN DISPUTE THAT THE AFORESAID TWO AMOUNTS HAVE BEEN DEPOSITED BY THE TWO PARTNERS IN THEIR CAPITAL ACCOUNT. THE PARTNERS ARE INCOME TAX PAYEE. THEY HAVE EXPLAINED THE SOURCE AS HAVING RECEIVED GIFT FROM VARIOUS PERSONS, WHO HAVE ALSO FILED THEI R INCOME TAX RETURNS AND HAVE BEEN ASSESSED ACCORDINGLY. MERELY BECAUSE, THE DONO RS ARE WEAVERS AND THEY OWN ONLY ONE LOOM WOULD NOT MAKE ANY DIFFERENCE. THEY H AVE FILED THEIR INCOME TAX RETURNS AND HAVE ALSO FILED THE RETURN UNDER THE GI FT TAX ACT. THEY HAVE PAID THE GIFT TAX ALSO. ASSESSMENT UNDER THE GIFT TAX ACT HAS ALS O BEEN MADE, THOUGH THE ASSESSMENTS MADE WERE SUMMARY IN NATURE. IN THE CAS E OF ANIL RICE MILLS (SUPRA), THIS COURT HAS HELD THAT THE ASSESSEE CANNOT BE ASK ED TO PROVE THE SOURCE OF SOURCE OR THE ORIGIN OF ORIGIN. 9. TAKING THE VARIOUS FACTS ENUMERATED ABOVE, WE ARE OF THE CONSIDERED OPINION THAT THE TRIBUNAL HAD ERRED IN HOLDING THAT THE AMOUNT D EPOSITED BY THE TWO PARTNERS IS LIABLE TO BE ADDED UNDER SECTION 68 OF THE ACT ON T HE GROUND THAT THE GIFTS RECEIVED ITA NO 5250/MUM/2016 SHIVAM IMPEX ASSESSMENT YEAR 2004-05 5 BY THE RESPECTIVE PARTNERS FROM THE VARIOUS PERSONS COULD NOT BE EXPLAINED AS THE CREDITWORTHINESS OF THE DONORS HAD NOT BEEN ESTABLI SHED. THE TRIBUNAL HAD WRONGLY DRAWN AN ADVERSE INFERENCE UPON THE FACT THAT THE D ONORS HAD FILED THEIR INCOME TAX RETURN FOR THE ASSESSMENT YEARS 1988-89 TO 1991-92 ON A SINGLE DAY AND FURTHER THE RETURN FOR THE GIFT TAX WAS FILED ON 25.08.1992 , WHICH WAS WELL WITHIN THE DUE DATE. 10. THE APPELLANT HAS EXPLAINED THE NATURE AND SOURCE OF THE DEPOSIT AND HAS DISCHARGED ITS BURDEN. THE ORDER OF THE TRIBUNAL ON THIS GROUND THEREFORE CANNOT BE SUSTAINED AND IS LIABLE TO BE SET ASIDE. THE APPEAL SUCCEEDS AND IS ALLOWED. SIMILARLY, IN ABHYUDAYA PHARMACEUTICALS V. COMMISSIONER OF INCOME -TAX [32 TAXMANN.COM 68], HONBLE COURT HAS OBSERVED AS UNDER:- 10. SO FAR AS THE SECOND LIMB OF THE ARGUMENT THAT AT WHOSE HANDS THE ADDITION SHOULD BE MADE IS CONCERNED, IT IS APT TO HAVE A LO OK TO SECTION 68 OF THE INCOME TAX ACT. HEADING OF THE SAID SECTION IS 'CASH CREDI TS' AND IT READS THAT WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE M AINTAINED FOR ANY PREVIOUS YEAR, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NA TURE AND SOURCE THEREOF OR THE EXPLANATION OFFERED BY HIM IS NOT, IN THE OPINION O F THE ASSESSING OFFICER, SATISFACTORY, THE SUM SO CREDITED MAY BE CHARGED TO INCOME TAX AS INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. 11. IT MAY BE NOTED THAT SECTION 68 OF THE INCOME TAX ACT, 1971 IS A NEW PROVISION IN THE SENSE THAT THERE WAS NO SUCH PROVISION UNDER THE OLD ACT I.E. THE INCOME TAX ACT, 1922. EVEN THEN THE UNDERLYING PRINCIPLE OF SE CTION 68 WAS GIVEN JUDICIAL RECOGNITION BY COURTS. IN OTHER WORDS, THE PRINCIPL E HAS BEEN DEVELOPED ON THE BASIS OF JUDICIAL DECISIONS WHICH HAS BEEN GIVEN STATUTOR Y RECOGNITION BY SECTION 68. 12. CIT V. JAISWAL MOTOR FINANCE [1983] 141 ITR 706 (ALL.) IS A DIVISION BENCH AUTHORITY OF THIS COURT WHEREIN IT HAS BEEN LAID DO WN THAT IF THERE ARE CASH CREDIT ENTRIES IN THE BOOKS OF THE ASSESSEE FIRM IN WHICH ACCOUNTS OF AN INDIVIDUAL PARTNER EXISTS, AND IT IS FOUND AS A FACT THAT THE CASH WAS RECEIVED BY THE FIRM FROM ITS PARTNERS THEN IN THE ABSENCE OF ANY MATERIAL TO IND ICATE THAT THEY WERE PROFITS OF THE FIRM, IT COULD NOT BE ASSESSED IN THE HANDS OF THE FIRM. THE LEARNED COUNSEL FOR THE APPELLANT SUBMITS THAT THE AFORESAID DECISION APPLI ES WITH FULL FORCE TO THE FACTS OF THE CASE ON HAND. NOTICEABLY, THIS WAS ALSO A CASE WHER E IT WAS THE FIRST YEAR OF ASSESSMENT OF THE FIRM. THE OBSERVATIONS MADE THERE IN IF READ IN THE CONTEXT OF THE FACTS OF THE PRESENT CASE, THE SUBMISSION OF THE AP PELLANT'S COUNSEL IS WELL FOUNDED. THE RELEVANT EXTRACT IS REPRODUCED BELOW:- 'IT APPEARS TO BE WELL SETTLED THAT IF THERE ARE CA SH CREDIT ENTRIES IN THE BOOKS OF THE FIRM IN WHICH THE ACCOUNTS OF THE INDIVIDUAL PA RTNERS EXIST AND, IT IS FOUND AS A FACT THAT CASH WAS RECEIVED BY THE FIRM FROM ITS PA RTNERS THEN IN THE ABSENCE OF ANY MATERIAL TO INDICATE THAT THEY WERE PROFITS OF THE FIRM, IT COULD NOT BE ASSESSED IN THE HANDS OF THE FIRM. WE ARE, THEREFORE, OF THE OPINION THAT THE TRIBUNAL DID NOT COMMIT ANY ERROR OF LAW AND RIGHTLY HELD THAT THE D EPOSITS SHOWN IN ITS ACCOUNTS WERE SATISFACTORILY EXPLAINED.' ITA NO 5250/MUM/2016 SHIVAM IMPEX ASSESSMENT YEAR 2004-05 6 13. AT THIS STAGE, THE LEARNED STANDING COUNSEL FOR TH E DEPARTMENT PLACES RELIANCE UPON ANOTHER DIVISION BENCH DECISION OF THIS COURT IN THE CASE OF KAPUR BROTHERS (SUPRA). IT IS APT TO EXAMINE THE FACTS OF THE CASE OF KAPUR BROTHERS (SUPRA). THE ASSESSING OFFICER FOUND A DEPOSIT OF CERTAIN AM OUNT WHILE MAKING ASSESSMENT OF M/S. KAPOOR BROTHERS. THE AMOUNT WAS DEPOSITED I N THE NAME OF ITS PARTNERS. THE DEPOSITS WERE ENTERED AS ON 20TH OCTOBER, 1966. THE ACCOUNTING PERIOD FOR THE ASSESSMENT YEAR 1967-68 ENDED ON 11TH NOVEMBER, 196 8. THE EXPLANATION OFFERED BY THE ASSESSEE WAS NOT FOUND SATISFACTORY. IN THIS FACTUAL BACKGROUND, IT WAS NOTICED THAT THE ENTRIES WERE MADE ABOUT THREE WEEK S PRIOR TO THE END OF THE ACCOUNTING PERIOD. IN THIS FACTUAL BACKGROUND THE H IGH COURT HELD THAT CASH CREDIT ENTRIES STANDING IN THE NAME OF PARTNERS IN THE ACC OUNT BOOKS OF THE FIRM WOULD VALIDLY BE TREATED AS INCOME OF FIRM FROM UNDISCLOS ED SOURCE. 14. ON A FIRST FLASH, IT APPEARS THAT THE RATIO OF THE AFORESAID DECISIONS GIVEN IN THE CASE OF KAPUR BROTHERS (SUPRA) AND JAISWAL MOTOR FI NANCE (SUPRA) IS CONFLICTING, BUT ON A MEANINGFUL READING THEREOF, WOULD SHOW THAT TH EY WERE RENDERED IN DIFFERENT FACTUAL MATRIX. THE RATIO LAID DOWN IN THE CASE OF KAPUR BROTHERS (SUPRA) WILL BE APPLICABLE IN A CASE WHERE A PARTNER BRINGS CAPITAL AMOUNT AT THE FORMATION OF THE FIRM ITSELF, BEFORE THE COMMENCEMENT OF BUSINESS BY THE FIRM. IT WOULD NOT BE APPLICABLE IN A CASE WHERE THE DEPOSIT IS REFLECTED IN THE ACCOUNT BOOKS OF THE FIRM DURING THE CURRENCY OF THE BUSINESS OF THE FIRM. TH E UNDERLYING IDEA IN THE CASE OF KAPUR BROTHERS (SUPRA) IS THAT WHEN THE ASSESSEE FIRM HAS NO BUSINESS, IT CANNOT POSSIBLY HAVE ANY INCOME. THEREFORE, IN SUCH A CASE THE QUESTION OF PRESUMPTION OF INCOME OF THE ASSESSEE FIRM WOULD NOT ARISE GENERAL LY. BUT IT IS NOT APPROPRIATE WHEN THE ASSESSEE FIRM IS EARNING INCOME FROM ITS B USINESS AND IN THAT SITUATION THE ASSESSEE FIRM HAS TO EXPLAIN THE CASH CREDIT ST ANDING IN ITS ACCOUNT. IF THE ABOVE LINE OF DISTINCTION IS KEPT IN MIND, WE FIND THAT BOTH THE DECISIONS ARE STANDING ON A DIFFERENT FACTUAL BACKGROUND. 15. IT IS INTERESTING TO NOTE THAT THE AFORESAID TWO D ECISIONS ONE GIVEN IN THE CASE OF JAISWAL MOTOR FINANCE (SUPRA) AND ANOTHER IN THE CASE OF KAPUR BROTHERS (SUPRA) WERE AGAIN UP FOR CONSIDERATION BEFORE A DIVISION B ENCH OF THIS COURT IN THE CASE OF INDIA RICE MILLS V. CIT [1996] 218 ITR 508/85 TAXMAN 227 (ALL.). THE RELEVANT EXTRACT IS REPRODUCED BELOW:- 'HOWEVER, THE TRIBUNAL RELYING ON CIT V. KAPUR BROT HERS [1979] 118 ITR 741 (ALL.) , HELD THAT SINCE THE AMOUNT WAS CREDITED IN THE BOOK S OF THE ASSESSEE-FIRM, IT IS FOR THE ASSESSEE TO EXPLAIN THE SOURCE OF THE DEPOSITS AND AS THE ASSESSEE-FIRM FAILED TO DISCHARGE THAT ONUS, THE DEPOSITS WERE RIGHTLY T AKEN TO BE THE INCOME OF THE ASSESSEE-FIRM FROM UNDISCLOSED SOURCES BY THE ASSES SING AUTHORITY.' ** ** ** 'RELIANCE ON KAPUR BROTHERS' CASE [1979] 118 ITR 741 (ALL.) IS MISPLACED, INASMUCH AS IN THAT CASE DEPOSITS WERE ENTERED IN THE BOOKS OF THE FIRM WHEN IT WAS ALREADY CARRYING ON ITS BUSINESS. THE FIRM WAS CALLED UPON TO EXPLAIN THE SOURCE OF THE DEPOSITS. THE EXPLANATION OF THE FIRM WAS THAT THE DEPOSITS REPRESENTED THE SALE PROCEEDS OF CERTAIN ASSETS BELONGING TO THE PARTNER S. WHEN NO EVIDENCE WAS ADDUCED TO SUBSTANTIATE THAT EXPLANATION, THE ASSES SING AUTHORITY ADDED THE AMOUNT ITA NO 5250/MUM/2016 SHIVAM IMPEX ASSESSMENT YEAR 2004-05 7 AS INCOME OF THE PARTNERSHIP-FIRM. THESE FACTS ARE MATERIALLY DIFFERENT FROM THE FACT OF THE INSTANT CASE. MOST STRIKING FEATURE OF THE C ASE ON HAND IS THAT ALL THE DEPOSITS CAME TO BE MADE DURING THE ACCOUNTING YEAR IN THE B OOKS OF THE ASSESSEE-FIRM BEFORE IT STARTED ITS BUSINESS. THEREFORE, THE ONUS WAS ON THE PARTNERS TO EXPLAIN THE SOURCE IN THE CASE ON HAND AND IF THEY FAILED, THE AMOUNT COULD HAVE BEEN ADDED IN THEIR HANDS ONLY AND NOT IN THE HANDS OF THE ASSESS EE-FIRM.' 16. ON THE FACTS AND CIRCUMSTANCES OF THIS CASE, WE AR E OF THE CONSIDERED OPINION THAT THE AUTHORITIES BELOW HAVE COMMITTED ERROR AS THEY HAVE FAILED TO TAKE INTO ACCOUNT THAT THIS WAS THE FIRST YEAR OF THE BUSINES S OF THE ASSESSEE FIRM. THE PARTNERSHIP FIRM WAS FORMED ON 5.7.1990 AND ON 7.7. 1990 MASTER SHISHIR GARG DEPOSITED RS. 1,90,000/- AND RS. 72,000/- AS CAPITA L MONEY WITH THE FIRM THROUGH BANK CLEARANCE OF TWO BANK DRAFTS. THE ACCOUNTING P ERIOD BEING FINANCIAL YEAR I.E. ENDING ON 31ST OF MARCH, 1991, THE FIRM COULD NOT H AVE ANY INCOME AT THE TIME OF ITS FORMATION. THE IDENTITY OF THE DEPOSITOR I.E. MASTE R SHISHIR GARG WAS NOT IN ISSUE AT ANY POINT OF TIME BEFORE THE INCOME TAX AUTHORITIES . THEY TREATED THE SAID DEPOSIT BY MASTER SHISHIR GARG. THIS BEING SO, IF FOR ONE R EASON OR THE OTHER, THEY WERE NOT SATISFIED WITH THE FINANCIAL CAPABILITY OF MASTER S HISHIR GARG, THE AMOUNTS COULD HAVE BEEN ADDED AT THE HANDS OF MASTER SHISHIR GARG AND NOT AT THE HANDS OF FIRM. 17. THE DECISION RELIED UPON BY THE LEARNED COUNSEL FO R THE DEPARTMENT IS CLEARLY DISTINGUISHABLE ON FACTS AS IT WAS NOT IN RESPECT O F FIRST YEAR OF THE BUSINESS AND HAS NO APPLICATION WHATSOEVER. THE ARGUMENT PUT BY HIM THAT THE INCOME WAS LIABLE TO BE ADDED IN THE HANDS OF FIRM AS MASTER SHISHIR GAR G BEING MINOR COULD NOT BE PROSECUTED, HAS NO SUBSTANCE. 18. IT MAY BE NOTED THAT THE DECISION GIVEN IN THE CASE OF JAISWAL MOTOR FINANCE (SUPRA) IS BEING CONSTANTLY FOLLOWED BY THI S COURT IN THE SUBSEQUENT DECISIONS. REFERENCE CAN BE MADE TO SURENDRA MOHAN V. CIT [1996] 221 ITR 239 (ALL.) 19. THE RAJASTHAN HIGH COURT IN CIT V. KEWAL KRISHNA & PARTNERS [2009] 18 DTR 121 HAS ALSO TAKEN SIMILAR VIEW. 20. IN VIEW OF THE ABOVE, WE ARE OF THE CONSIDERED OPI NION THAT ON THE FACTS OF THE PRESENT CASE, THE TRIBUNAL WAS NOT JUSTIFIED IN HOL DING THAT THE UNEXPLAINED CASH CREDIT RECORDED IN THE ASSESSEE'S BOOK BE ADDED IN THE HANDS OF THE ASSESSEE. WE, THEREFORE, HOLD THAT THERE WAS NO MATERIAL BEFORE T HE TRIBUNAL IN HOLDING THAT RS.1,90,000/- INTRODUCED BY MASTER SHISHIR GARG AT THE TIME OF STARTING OF THE BUSINESS, AS INCOME OF THE ASSESSEE FIRM. THE TRIBU NAL ERRONEOUSLY CAME TO THE CONCLUSION THAT THE DEPOSITS REPRESENTED UNDISCLOSE D INCOME OF THE ASSESSEE FIRM. ALL THE THREE AUTHORITIES BELOW COMMITTED THE SAME MISTAKE AND IN THIS REGARD THEIR ORDERS CANNOT BE ALLOWED TO STAND. SIMILAR VIEW HAS BEEN TAKEN BY THE HONBLE PATNA HI GH COURT IN CIT VS. ANURAG RICE MILLS [282 CTR (PATNA) 200]. ITA NO 5250/MUM/2016 SHIVAM IMPEX ASSESSMENT YEAR 2004-05 8 8. AFTER CAREFUL CONSIDERATION OF THE RATIO OF ABOV E DECISIONS VIS--VIS FACTS OF THE PRESENT CASE, WE FIND THAT REVENUE IS UNABLE TO ESTABLISH THE FACT THAT THE CAPITAL CONTRIBUTION RECEIVED BY THE ASSESSEE FIRM WAS UNACCOUNTED MONEY OF THE ASSESSEE FIRM. SECONDLY, T HE ASSESSEE COULD NOT BE EXPECTED TO PROVE THE SOURCE OF SOURCE AND A DDITION WHICH COULD BE MADE ON THIS ACCOUNT, COULD BE MADE IN THE HANDS OF THE RESPECTIVE PARTNERS ONLY. THEREFORE, WHILE IN PRINCIPLE, ALLOW ING ASSESSEES APPEAL, WE DEEM IT FIT TO RESTORE THE MATTER BACK TO THE FI LE OF LD. CIT(A) FOR LIMITED PURPOSE OF VERIFICATION OF THE FACT THAT TH E ASSESSEE FIRM HAS RECEIVED THE CAPITAL CONTRIBUTION FROM THE BANK ACC OUNTS OF THE RESPECTIVE PARTNERS AND NOT FROM THE DONORS DIRECTL Y. IF THE SAME IS DIRECTLY RECEIVED FROM THE PARTNERS, THE IMPUGNED A DDITIONS SHALL STAND DELETED ELSE LD. CIT(A) IS TO DECIDE THE SAME AS PE R LAW. THE ASSESSEE, IN TURN, IS DIRECTED TO SUBSTANTIATE THE SAME WITH DOCUMENTARY EVIDENCES FAILING WHICH LD. CIT(A) SHALL BE AT LIBERTY TO DEC IDE THE SAME ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 9. RESULTANTLY, THE ASSESSEES APPEAL STANDS ALLOWE D FOR STATISTICAL PURPOSES IN TERMS OF OUR ABOVE ORDER. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD AUGUST, 2017. SD/- SD/- (D.T. GARASIA) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 23 . 08.2017 SR.PS:- THIRUMALESH ITA NO 5250/MUM/2016 SHIVAM IMPEX ASSESSMENT YEAR 2004-05 9 ! / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $%!# / THE RESPONDENT 3. , ( ) / THE CIT(A) 4. , / CIT CONCERNED 5. $'. , . , / DR, ITAT, MUMBAI 6. / / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI