MRINAL JYOTI DAS,GUWAHATI vs. ITO, WARD- 1(3), GUWAHATI

IN THE INCOME TAX APPELLATE TRIBUNAL – GUWAHATI BENCH VIRTUAL BENCH AT KOLKATA Before Shri Sonjoy Sarma, Judicial Member and Shri Rakesh Mishra, Accountant Member ITA No.284/GTY/2024 Assessment Year: 2018-19 Mrinal Jyoti Das……………………………………………….………...Appellant House No.33, Suraj Nagar Six Mile, Guwahati [PAN: AGXPD6562D] vs. ITO, Ward-1(3), Guwahati.……………………………..……...…..…..Respondent Appearances by: Shri Kishore Jain, FCA, appeared on behalf of the Appellant. Shri Santosh Kumar Karnani, Addl. CIT, appeared on behalf of the Respondent. Date of concluding the hearing : April 22, 2026 Date of pronouncing the order : April 24, 2026

ORDER Per Sonjoy Sarma, Judicial Member: The present appeal filed by the assessee is directed against the order dated 03.10.2024 passed by the NFAC, Delhi [hereinafter referred to as the ‘Ld. CIT(A)] u/s 250 of the Income Tax Act, 1961 (the ‘Act’) for the assessment year 2018-19. 2. Brief facts of the case are that, the case of the assessee was selected for complete scrutiny and accordingly notices u/s 143(2) and 142(1) of the Act were issued. The primary reason for selection was substantial increase in capital during the year under consideration. In response, the assessee submitted before the Assessing Officer that increasing in capital was on account of transfer of sundry creditors. It was explained that such creditors originally belong to partnership firm in which assessee was a partner and subsequently the liabilities were transferred to assessee’s proprietorship concerned namely, M/s Mrinal

ITA No.284/GTY/2024 Mrinal Jyoti Das Jyoti Das, and thereafter, reflected in the assessee’s individual balance sheet. Accordingly, the assessee liabilities thus became personal obligation, resulting in a corresponding increase in capital amount. However, the Assessing Officer observed that assessee failed to furnish satisfactory evidence to substantiate the claim, no proper documentation or trail of transaction was produced. Consequently, the Assessing Officer treated the sum of Rs.1,54,41,000/- as unexplained credit in the books of assessee and made addition u/s 68 taxing the same u/s 115BBE of the Act. 3. Dissatisfied with the above order, assessee went in appeal before the Ld. CIT(A), where the Ld. CIT(A) observed that the balance-sheet relied upon by the assessee was not audited, no schedules or annexures were filed for verification. In this connection, no documentary evidence establishing the flow/ transfer of creditors was produced and no trail was demonstrated to show movement from partnership firm to proprietorship concerned and ultimately to the individual accounts. It was further noted that nearly reflecting creditors in presenting the balance-sheet without supporting evidence does not establish genuineness. Accordingly, the Ld. CIT(A) upheld the addition made by the Assessing Officer. 4. Aggrieved by the above order, assessee is in appeal before this Tribunal. At the time of hearing, the Ld. AR submitted that assessee is a partner in partnership firm namely, M/s Macrocosm Builders, creditors to the firm were transferred to assessee’s proprietorship concerned namely, M/s Mrinal Jyoti Das, and ultimately to the individual balance- sheet of the assessee. Therefore, increasing capital was properly explained and due to this the capital of the assessee was increased. Further, it was fairly admitted that the supporting documents could not be produced at the time of hearing before the authorities below.

ITA No.284/GTY/2024 Mrinal Jyoti Das 5. On the other hand, the Ld. DR relied on the orders of the lower authorities and submitted that only specific items such as capital contribute, interest and remuneration are ordinarily credited to the partnership capital accounts, transfer of third-party creditors directly to the partners capital accounts is not a normal or acceptable practice without proper legal and account backing. In absence of evidence, the addition was rightly sustained by the Ld. CIT(A). 6. We have heard the rival submission of the parties and perused the material available on record, it is observed that the assessee has claimed transfer of creditors from partnership firm namely, M/s Macrocosm Builders to its and proprietorship firm namely, M/s Mrinal Jyoti Das, and ultimately to its individual balance-sheet. However, no documentary evidence has been furnished to establish such transfer before the Bench. No proper trail or reconciliation has been demonstrated. Therefore, the genuineness and legality of such transactions remain unverified. In absence of such supporting material, the claim of assessee could not be conclusively adjudicated at this stage, at the same time, issue requires proper factual verification particularly with regard to whether such transfer of liabilities actual took place or whether such transfer is permissible under the law and call for and examine supporting documents, books of accounts to prove the trail of the transaction to establish assessee’s case. In view of the above, we deem it appropriate to set aside the impugned order and restore the matter to the file of Assessing Officer for fresh examination. The Assessing Officer shall verify the entire trail of the transaction from partnership firm to proprietorship concerned and thereafter to the individual account of the assessee. Doing so examine the legal permissibility of such books of accounts confirmation and reconciliation by providing adequate opportunity of being heard to the assessee. The assessee is also directed to fully cooperate and furnish all

ITA No.284/GTY/2024 Mrinal Jyoti Das necessary evidence in support of the claim. The Assessing Officer should also examine subsequent issues where those liabilities were paid or not to the concerned creditors in subsequent years or not. 7. In terms of the above, appeal of the assessee is allowed for statistical purposes.

Kolkata, the 24th April, 2026.

Sd/- Sd/- [Rakesh Mishra] [Sonjoy Sarma] Accountant Member Judicial Member Dated: 24.04.2026. DP, PS Copy of the order forwarded to: 1. Appellant - 2. Respondent - 3. CIT(A)- 4. CIT- , 5. CIT(DR),

//True copy// By order Assistant Registrar, Kolkata Benches