ITO,WARD-40(3),KOLKATA, KOLKATA vs. SRI PRADIP BHATTACHARJEE, KOLKATA

Learned Departmental Representative first of all takes us to CIT(A)’s discussion on the above sole issue deleting the impugned addition as under:- “3.3 I have considered the facts of the case and the submissions of the appellant. The AO added a sum of Rs.49,01,890/- with the remarks “Undisclosed Investment” in the hands of the appellant although the ITO Wd-40(3) Kol. Vs. Sh. Pradip Bhattacharjee Page 2 same has duly incorporated in the Financial Books of account of Shreedhar Construction wherein the appellant is one of the partner. The appellant has all along maintained that this account belonged to a partnership firm ‘M/s Sreedhar Construction’ where the appellant was partner. The assessee categorically stated “that the aforesaid Bank account, although held in the name of appellant but the same belonged to a firm called Shreedhar Construction” having PAN No. ACOFS0370F and the same was duly incorporated in its books of account. The assessee also filed the accounts and copy of Acknowledgement of Income Tax Return filed by the said Shreedhar Construction during the course of hearing before assessing officer. Further, it is stated in the assessment order in Page 4 in fourth paragraph that ‘… .. the assessee failed to produce any partnership deed executed among the partners of M/s Shreedhar Construction’ which is not correct as he was never asked to produce the said Partnership Deed. However, a copy of Partnership Deed of Shreedhar Construction duly registered with District Sub-Registrar-II dated 26-11-2012, is enclosed for your goodself’s reference and record. It is worth mentioning in this connection that a partnership firm cannot open a saving bank account but the same can always be opened in it partner or partner name which is not against any law. Further it is to be noted that all the cash transactions in the said Savings Bank account are duly recorded in the Books of account of Shreedhar Constructions”. An inspection of the documents revealed that the balance in the bank account was clearly mentioned in its Balance sheet which confirms that the whole bank account belonged to M/s Sreedhar Construction. It was wrong on the apart of the AO to assume that it was an undisclosed account of the appellant after all documents clearly real its true owner. Hence, the addition on this ground is deleted.”

Learned Departmental Representative’s sole contention before us is that CIT(A) ought to have sought a remand report from the Assessing Officer qua assessee’s additional submissions filed during the course of lower appellate proceedings that the impugned sum represented his partnership firm balance only. We see no merit in Revenue’s instant grievance. It has come on record that assessee had filed relevant accounts as well as his partnership firm’s income tax return’s acknowledgement before the Assessing Officer sufficiently indicating that the amount in question belonged to the firm only as it could not have itself opened the two bank accounts in question. Suffice to say, the amount in question stands explained and verified from the partnership firm’ books of account as well. The same therefore cannot be held to be a ITO Wd-40(3) Kol. Vs. Sh. Pradip Bhattacharjee Page 3 case of unexplained investment within the meaning of section 69 of the Act. The Revenue’s sole substantive ground fails accordingly.