SHUBHAM CONSTRUCTIONS,KOLKATA vs. D.C.I.T., CIRCLE - 30,, KOLKATA

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ITA 2647/KOL/2025Status: DisposedITAT Kolkata21 April 2026AY 2013-20146 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that capital introduced by a partner cannot be taxed in the hands of the firm when the partner is identifiable and genuine. The Tribunal found that the identity, genuineness, and creditworthiness of the partner M/s Saztra Commercial Pvt. Ltd. were not questioned, and the transaction was through banking channels.

What were the facts?

The assessee firm received Rs. 25,00,000 as capital contribution from its partner, M/s Saztra Commercial Pvt. Ltd., which in turn received the funds from M/s Sumati Vanijya Pvt. Ltd. The Assessing Officer made an addition for this amount, which was confirmed by the CIT(A) despite the assessee providing documentary evidence.

What were the issues?

Whether the addition of capital contribution from a partner is valid when the partner's identity and genuineness are established, and the source of funds is also demonstrated through banking channels.

Which sections of the Income-tax Act were involved?

Section 250,Section 143(2),Section 133(6),Section 40(a)(ia)

AI-generated summary — verify with the full judgment below

Before: ShriRajesh Kumar & ShriPradip Kumar Choubey

IN THE INCOMETAXAPPELLATE TRIBUNAL“D” BENCH, KOLKATA Before ShriRajesh Kumar, Accountant Member and ShriPradip Kumar Choubey, Judicial Member ITA No.2647/KOL/2025 Assessment Year: 2013-14 Shubham Constructions……………..………………………………...Appellant 36/1A, Garcha Road, 4th Floor Gariahat, Kolkata West Bengal-700019 [PAN No. ABDFS8363A] Vs. DCIT, Circle 30, Kolkata………………....…………………….…….Respondent Appearances by: Shri C.M Roy,CA,appeared on behalf of the Appellant. ShriS.B. Chakraborthy, Sr. DR,appeared on behalf of the Respondent. Date of concluding the hearing :March24, 2026 Date of pronouncing theorder : April 21,2026 ORDER Per Pradip Kumar Choubey, Judicial Member: This appeal filed by the assessee is directed against the order dated 23.09.2024 of the NFAC, Delhi [hereinafter referred to as the ‘CIT(A)’] passed under Section 250 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) for the assessment year 2013-14. 2. The brief facts of the case are that, assessee filed return of income for the assessment year 2013-14, declaring total income at Rs.67,00,710/-. The case of the assessee was selected for scrutiny notice u/s 143(2) was issued and in response to the notices, the Ld. AR contested the proceedings and furnished some details and information but as per the Assessment Officer, the assessee failed to produce the books of accounts mentioned in the Audit Report and he remained evasive and non-cooperative in furnishing of the information in respect of Unsecured Loans, Capital Introduction, Sundry Creditors

ITA No.2647/Kol/2025 Shubham Constructions and amounts debited into the P & L A/c. As a result of which, the Assessing Officer made following additions: -

3.

Aggrieved by the said order, assessee preferred an appeal before the Ld. CIT(A) wherein the appeal of the assessee has been partly allowed, as the Ld. CIT(A) deleted the additions with respect to the bogus Sundry Creditors i.e. amount of Rs.57,84,094/-, deleted the addition of cash credit in the shape of loans of Rs.8,61,50,000/-, deleted the amount of Rs.55,00,916/- disallowance of interest of loans and partly allowed the disallowance, u/s 40(a)(ia) as he deleted an amount of Rs.24,996/- out of 29,996/-, and sustained only Rs.5,000/- but the Ld. CIT(A) dismissed the appeal of the assessee on the issue of addition of capital introduction amount of Rs.25,00,000/-.

4.

Aggrieved and dissatisfied on the addition of capital introduction of Rs.25,00,000/-, the assessee preferred appeal before us. The Ld. AR challenges the very impugned order thereby, submitting that the Ld. CIT(A) has erred in confirming the addition in case of capital

ITA No.2647/Kol/2025 Shubham Constructions contribution, ignoring the reality that no addition could be made in the hands of the Firm in case of capital contribution by partnerwhen the identity and genuineness of M/s Saztra Commercial Pvt. Ltd., one of the partners of assessee is proved. The Ld. AR submits that in the said assessment year, assessee beinga partnership Firm has received Rs.25,00,000/- as a capital contribution from one of its partner, M/s Saztra Commercial Pvt. Ltd., and the said sum had been received from its Sundry debtor i.e. M/s Sumati VanijyaPvt. Ltd.. The Ld. AR submits that during the remand proceedings, assessee furnished the bank statement, Audited Financial statement of M/s Sumati VanijyaPvt. Ltd. and compliance to notices issued u/s 133(6) by all the Companies and all the contentions has been duly acknowledged by the CIT(A) and he accepted the identity and genuineness of the transaction. The Ld. AR further submits that the net worth of M/s Saztra Commercial Pvt. Ltd. is around Rs.1,23 crore and profit after tax is around Rs.52 lacs/- which shows strong creditworthiness of M/s Saztra Commercial Pvt. Ltd. The Ld. AR submits that it is a settled legal position that capital introduced by partner cannot be taxed in the hands of Firm, when the partner is identifiable and genuine one. The Ld.AR filed the following documents: -

ITA No.2647/Kol/2025 Shubham Constructions Contrary to that the Ld. DR supports the impugned order.

5.

Upon hearing the submission of the Counsel of the respective parties and on perusal of the impugned order, the sole point of dispute is regarding the addition of Rs.25,00,000/- as unexplained cash credit by the Assessing Officer which has been confirmed by the appellate authority. It is important to mention here that the Assessing Officer made addition of Rs.25,00,000/- receivedas capital contributionfrom one of its partners, M/s Saztra Commercial Pvt. Ltd., by holding that the company had failed to proof its creditworthiness. During the remand proceedings, the assessee has furnished the following documents which are as below:-

i. Bank Statement evidencing fund flow. ii. Audited Financial Statement of M/s Sumati VanijyaPvt. Ltd. iii. Compliance to notices issued u/s 133(6) by all the Companies.

6.

The Ld. CIT(A) in its order held that assessee has been able to prove the identity and genuineness of the transaction but according to theLd. CIT(A) creditworthiness of the M/s Sumati VanijyaPvt. Ltd. is doubtful. Now, coming to the documentary evidences filed by the assessee, we find that assessee had received the fund as capital contribution from one of the partners of the assessee’s Firm i.e. M/s Saztra Commercial Pvt. Ltd. and Saztra received the fund from M/s Sumati VanijyaPvt. Ltd. and the entire transaction were carried out through banking channels.The identity, genuineness and credit worthiness of M/s Saztra Commercial Pvt. Ltd. being a partner (source) has not been questioned, doubted either by the Assessing Officer or by the Ld. CIT(A). It is further important to mention here that in response to the notice u/s 133(6) to M/s Sumati VanijyaPvt. Ltd., assessee furnished the copy of the Audit Report for the financial years 2010-11 & 2011-12 and also the details of list of parties under the head of 4

ITA No.2647/Kol/2025 Shubham Constructions unsecured loans. On perusal of the documents, it was observed that M/s Sumati VanijyaPvt. Ltd. has shown as liability under below in the name of M/s Suztra Commercial Pvt. Ltd. which are as follows: -

Sl. No. Name of party F.Y. Year Closing Balance 1. 2010-11 2,00,000/- 2. Saztra Commercial Pvt. Ltd. 2011-12 14,40,445/- 3. 2012-13 21,31,968/- On perusal of the bank statement of Saztra Commercial Pvt. Ltd. (at page 74 of the P.B.) we find that a transaction amounting of Rs 25,00,000/-was made with Sumati Vinijya Pvt. Ltd..

7.

It is undisputed fact that capital introduced by a partner, and it is a settled legal position that capital introduced by a partner cannot be taxed in the hands of the Firm (assessee) as a partnership Firm. We further find that the Ld. CIT(A) is satisfied with the identity and genuineness of the M/s Sumati VanijyaPvt. Ltd. but doubted the credit worthiness of the M/s Sumati Vanijya Pvt. Ltd.. The amount of Rs.25,00,000/- paid by M/s Sumati Vanijya Pvt. Ltd. to its sundry creditors i.e. M/s Saztra Commercial Pvt. Ltd. is repayment of loan which had taken earlier. The interest has been paid on the same and TDS has also been deducted on the same and has been deposited. Since, the loan was given on the normal course of business and the same was repaid back.Keeping in view of the discussion made above we are of the view that addition sustained by the Ld. CIT(A) is only on mere presumptions. Accordingly, we deleted the addition made in the hands of the assessee.

In the result, appeal of the assessee has been allowed.

Kolkata, the 21st April, 2026.

ITA No.2647/Kol/2025 Shubham Constructions

Sd/- Sd/- [Rajesh Kumar] [Pradip Kumar Choubey] Accountant Member Judicial Member Dated:. 21.04.2026. DC, 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

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