M/S J.V.KULKARNI & FRIENDS ASSOCIATES,MALKAPUR vs. D.C.I.T. CENTRALCIRCLE 1(2), NAGPUR

IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH,NACPUR BEFORE SHRI PK BANSAL; VICE-PRESIDENT AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA No: No: 607NNag/016 Assessment Year- 2012-13) Ms J.V, Kulkami & Friends DCIT Central Circle-1(2), Associates, Krupaldas Wadhwani Nagpur -440001 Complex Opp; Bus Stand, Vs: Buldhana Road Malkapulr-44310} , FAN: AAEFJ4199C (Appeliant} (Respondent_ Revenue by Assessee by Date ofhearing Date of Pronouncement Miss. Thomas (DR) Shri 'CWlt@hari+ &i _ Strjea Thoket 22.11.2057 01.01.2018 Order Under Sectiou 254(I of Jucome_Tux Act PER PAWAN SINGH_WWICLAL MEMBER:

L This appeal by assessee Under section 253 of the Act is directed agains1 Ihe order of Id CIT(A)-3, Nagpur dated 23.11.20/6 for Assessment Year (AY) 2012-13. The assessee has raised the following grounds of appeal: 1] The order passed by the AO, is bad in Jaw and: sane is confirmied by CLT(A) without appreciating of the fect and various decision cited by Lhe" asse3cee_ 2] Learned CIT(A) ened in confinning the addilion amounting [4) Ra.l,69,S0,000/- on accDunt of unexplained cash credit U/s,68 of [.T, Act. 3} Learned CI T(A} erred in not considered assessee's submissjan and vari)us document filed before him in Supporl of above addition 4} Learned CLT(A) erred in confirming the addition of Rs./ 1.94.225/- (MI exres: interest paid to partner Shri Narayandas Nihalani_ without #ppreciuling ( /h: fzc1. 5| Learned C.I.T(A} ered {II adding amounting lo Rs.2S.(HOO'- L1 {"cQuItl af cash payments Uls 40A(3). 6] Leamed CIT(A) &nd A.O. has not properly considered assessec's submissi:n: various supporting document & without applying his mind and passed Ahc' arakv . 1I4 Nw (Z/Niglbhx+ Jv Nulliri * Mln/- 2001-1 outset of hearing, the Id. Authorized Representativc (AR) 0l the 2 At the assessee submits that he is not pressing the Ground No. 4 & 5. We: havc Doted that after not pressing the Ground No 4 & 5 the only substantial ground m appeal remains for adjudication is if the Id: CIT(A) erred in confirming the addition of Rs. 1,69,50,000/- on account of unexplained cash credit under section 68 of the Act. 3 Brief facts of the case are that the assessee-firm is engaged in Lhe business of civil construction, filed its return of income for relevant AY on 25.03,2013 declaring total income of Rs, 9,06,070/-_ The assessment was completed section 14303) on 27.03.2015. The Assessing Officer (AO} while under passing the assessment order besides the other addition and disallowance made the addition of Rs 1,69,50,000/- holding that assessee has nol offered reasonable and acceptable explanation with regard to the credit in the books maintained by the assessee On appeal before the Id. CIT(A) the addilion under section 68 of the Act was upheld. Further, ~aggrieved by the order of Id. CIT(A), the assessee has filed the present appeal before uS We have heard the Id. Departmenta} Representative (DR) for the Revenue 4 and Id. Authorized Representative (AR) of the assessee and perused the material available on record. The Id, AR of the assessee argued that during the assessment proceeding aS wel} as in appellate proceeding the assessec has fumished complete details in respect of deposits in the account of partners The assessee furnished all the documents in the (orm of ledger accounl ol 3 H1: "u Mnmalom'-) % R"km g Ma {W%/il partners, copy of Profit & Loss Account, return of income, audited balance- shcet for relevant AY. The [d. AR of the asscssee #rgued thatl Fjc' J1ils discharged his onus, There was no dispulle about Ihe idetitity ( the persen The assessee aiso filed affidavil of all seven partners staling that thc anuns WvETt withdrawn from the firm in Financial Year 2010-] and tlle purpose lor withdrawal were not achieved, Hence, amount was re-depasited in the tirm in Financial Year 2010-]1. The assessee has conclusively proved lhe credit t0 the accounts of partners in the books of firm. The assessee has proved the creditworthiness of the partners. The AO as well as Id. CIT(A) ignored the direct and conclusive evidence which proved the credit in the accounls 0l' parlners in the books of fir The lower authorities instead of relerring the direct evidence added the arount 0n1 wrong presumptions. On the olher hand, the Id. DR for the Revenue supported the order of authorities bclow and argued thal the assessee has not discharged hjs Onus 5 We have considered the submission of the parties and perused the orders of authorilies below. We have seen that during the assessment procceding: the AO noted that the following amount was deposited in Ihe capital account ol the parlner of the assessee-firm. Sr. No. Name of the partics Date moun Giajcndra Dawala_ Jitendera Kulkarni 01,04.20]| 1&.00.QOp 2 03,02.2012 28.03,2012 01.004,20] [ 01.04.2012 01.04.2011 0L.04.201] 750NQQ 120).(OO) 14_Q()_425hQ . 28.Oti.LIO)U) 5U.((.{)C1Q) [8.UU.OUG} Mohan Talrcja Nand Kumar Rajput Narendra Nihlani Shirish P Dorle 6 ITA Nq ZNag16 wX /v K1ll,i976/ & Ik"nlsA~~."Llkn Tejrao $ Kabre 01,04.2011_ 1oial 8.QC.t)C)l) 16950 Ouni__ the source of deposits The asseSSC0 The assessee was asked 10 explain withdrawal ol Narendra Nihlani, Jitendera turnished the copy of bank The asscssee further staled thiat cash XAS Kulkarni and Mohan Talreja. The AO not accepted the cuntentiun of withdrawn for business purpose holding that the speci= fic purpose for withdrawal ol amount Irom? assessee fied, The assesgee was again asked to produce the capital account is not specil partner for examination The parlners were not produced for verification; thus the contention of assessee that the partner were trying lo acquire properly for the firm and that negotiation could nol be the purpose of business of to close the business activity ard refund thal the completed, they decided accepted by the AO. The AO made the addition under section money, was not 63 of the Act Before the Id. CIT(A) the assessee contended the similar contention and filed the copy of all the documents furnished before the AO before the AO the assessee filed In addition to the document furnished affidavit of all the partners In the affidavit, the partners contended thal all the decided to invest the fund in landed property S0 8S (0 deal in real partners were given advance in cash. The dclail 0l cash estate business. The partners withdrawal was provided. It waS further contended thBl when by date-wise land deali ling was not materialized they decided to refund the advance in ibeir capital account Ii 7/I fori; 741! I##1:' Rull M' 7 We have noted that the Id. CIT(A) has nol dispuled the lact thal tlere 04dS withdrawal in cash by the partners (rom the assessee '$ firm ir the erlier years The AO as well a8 the Id. CIT(A) raised suspicic atwul the specitic business purpose. Their suspicious wAS based as the parners has n0 disclosed as to whom the negotiation was carried Oui. We have lilrther noted zhat no (inding was given on the documents (urnished by assessee cither by AO or by Id. CIT(A) In our view, there is no dispute about the withdrawal i} cash by the partners from the assessee'$ firm in earlier year and deposit in subgequent Financial Year: The creditworthiness and identily ol' the pariners are not dispuled: It is well settled Iaw thal & revenue officer cannol sit in Lhe armchair of a businessman and dictate how 4 business is [c) bc: cricel i)lIl Thus, taking into account the totality of facls and circumstances ( the cuse' , IYe find that lhe AO had no material in his possession S) #> [u} Hhk' h/ In1 make the impugned additions. Thts, the addition was mzce by 4() 011 !nt/ suspicion and is not sustainable in eyes %f Iaw &nd theretan; Lhe Sc' TS Liable l0 deleted . No contrary decision is hrought [0 Olr notice. 7huus. !lc' gOLId noS , to 3 of the appeal are allowed, 8 In the result, appeal ofthe assessee is allowed, Order pronounced in the opcn cOurl on this 14 day of January. 20]8. Sdf Sd/_ (PKE BANSAL) (PAWAN SINCH) VICE-PRESIDENT JUDICIAL MEMBER Mumbai; Dated 01/01/2018 S.KPS Cepx OL the Order {orwarded_to MA N {zrvaz 6MXJY Nulki-n d M? , :1k.":= The Appellant The Respondelt The CITIA) Nagpur CT DR, HTAT, Nagpur Guard file. BJY (1IH |. {AsslRegisirar} [TAT,NACPUR ~ (faewdf