A AND M REAL ESTATE,MARGAO vs. INCOME TAX OFFICER, MARGAO

At the outset, Ld. Counsel for the assessee submitted that firstly double addition has been made as ld. AO has considered both the liability and asset side. He submitted that this is the first year of the partnership firm and the source of funds are from capital contribution from the partners and advances received from customers and therefore prayed for an opportunity for remitting effective issues to the file of ld. JAO for necessary adjudication.

On the other hand, ld. DR supported the order of ld. CIT(A).

We have heard the rival submissions and perused the material placed before us. We observe that assessee is a partnership firm and did not file return of income for A.Y 2015-16. It is claimed that this is the first year of incorporation of assessee firm. The assessee did not file return of income for the A.Y 2015-16. The ld. AO based on information that assessee has purchased immovable property at Rs. 1,24,24,242/- and also received advances of Rs. 84 lakhs from unknown entities issued notice u/s 148 of the Act which has been validly served upon the assessee. Subsequently assessee failed to participate in the assessment proceedings and ld. AO made the addition for unexplained advances received at Rs. 84 lakhs and unexplained investment of Rs. 1,24,24,242/-. Thereafter, Aggrieved assessee preferred appeal before ld. CIT(A) but failed to furnish necessary details resulting into dismissal of the appeal.

Before this Tribunal the assessee has furnished the details of bank account showing that the account of the assessee firm has been opened on 19.05.2014 indicating that assessee firm commenced business during 2014-15. Further on perusal of the balance sheet as on 31.03.2015 we note that there are two partners who have introduced the capital at Rs. 59,39,100/- each totaling into Rs. 1,18,78,200/-. There also appears advance from the customers at Rs. 84 lakhs. Total liability is Rs. 2,02,78,200/-. These funds received in the form of partners capital and advances from customers having been applied for purchase of immovable property in the form of land cost of Rs. 1,24,24,242/-. And remaining is closing work-in-progress, cash in hand and bank balances. Ld. AO in the assessment proceedings has made the addition for unexplained investment in land and unexplained advances from customers. The investment in land has been made out of the funds received from partners capital account and advances from customers. Therefore assessee only requires to prove the genuineness, creditworthiness and identity of the partners providing capital contribution at Rs. 1,18,78,200/- and the balance sum required to make investment in immovable property which is claimed to have been received as advance from customers at Rs. 84 lakhs.

We therefore deem appropriate that the issue of examining the source of capital and source of advances from customers to be restored to the file of ld. JAO for denovo adjudication since the funds received from partners as well as advance from customers have been utilized to make the investment in alleged immovable property. Needless to mention that the ld. JAO shall afford proper opportunity to the assessee. Further, we direct the assessee to remain cooperative in furnishing the details called for by the ld.JAO. Finding of ld. CIT(A) is set aside and effective grounds of appeal raised by the assessee are allowed for statistical purposes.

In the result, the appeal filed by the assessee is allowed for statistical purposes.

""थ" / The Respondent.

The Pr. CIT concerned. 4. िवभागीय "ितिनिध, आयकर अपीलीय अिधकरण, “SMC” ब"च, पुणे / DR, ITAT, “SMC” Bench, Pune. 5. गाड" फ़ाइल / Guard File. आदेशानुसार / BY ORDER,