GS & SD ASSOCIATES,CHENNAI vs. ITO, NCW-8(2), CHENNAI

ITA 2767/CHNY/2025Status: DisposedITAT Chennai26 February 2026AY 2017-181 pages
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What did the Tribunal hold?

The Tribunal held that the credit entry cannot be treated as the income of the assessee firm as the partner had affirmed the infusion and the penalty proceedings for violating Section 269SS were dropped. The addition made under Section 68 was deleted.

What were the facts?

The assessee, a firm, received a substantial cash infusion from a partner. The Assessing Officer treated this as unexplained income under Section 68, while the partner's assessment for the same amount was quashed due to procedural defects.

What were the issues?

Whether the cash infusion from a partner into the firm's current account can be treated as unexplained income under Section 68 when the partner has affirmed the transaction and penalty proceedings for related violations were dropped?

Which sections of the Income-tax Act were involved?

Section 68,Section 148,Section 147,Section 144B,Section 269SS,Section 271D,Section 151

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Before: Shri Inturi Rama Rao & Shri S.S. Viswanethra Ravi

Hearing: 08.01.2026Pronounced: 26.02.2026

PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:

This appeal filed by the assessee is directed against the order dated 22.08.2025 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi for the assessment year 2017-18. 2. The assessee raised 6 grounds amongst which the only issue emanates for our consideration as to whether the ld. CIT(A) is justified in confirming the addition made by the Assessing Officer und

The order continues below.

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