TARMO IT SERVICES,FARIDABAD vs. ACIT CIRCLE-2(1), FARIDABAD

ITA No.4469/Del/2025

IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH “B”NEW DELHI

BEFORE SHRIMAHAVIR SINGH, HON’BLE VICE PRESIDENT
AND SHRISANJAY AWASTHI, ACCOUNTANT MEMBER

आ.अ.सं/.I.T.A No.4469/Del/2025
िनधा रणवष /Assessment Year: 2017-18
TARMO IT SERVICES,
C/o Sandeep Goel, Advocate,
F-26/124, Sector-7, Rohini, Delhi.
PAN No.AAHFT9287F
बनाम
Vs.
ACIT,
Circle 2(1), C.R. Building,
Faridabad, Haryana.
अपीलाथ Appellant
यथ/Respondent

Assessee by Shri Sandeep Goel, Advocate
Revenue by Shri Sabyasachi Roy, Sr. DR

सुनवाईकतारीख/ Date of hearing:
15.12.2025
उोषणाकतारीख/Pronouncement on 17.12.2025

आदेश /O R D E R
PER SANJAY AWASTHI, ACCOUNTANT MEMBER:
1. This appeal arises from order dated 19.05.2025, passed u/s 250 of the Income Tax Act, 1961(hereinafter referred as “the Act”), by Ld.
CIT(A)-NFAC, Delhi. In this case,the Ld. AO vide his order dated
18.11.2019, is seen to have made additions u/s 68 of the Act on account of cash introduced as capital by two partners. Thus, Rs.12,00,000/- introduced by Mr. Tarun Chauhan and Rs.40,00,000/- by Mr. Mohit
Manochahas been subjected to the rigours of section 68 of the Act.
1.1
The assessee being aggrieved with this action of the Ld. AO, approached the Ld. CIT(A)’s where also he could not succeed on the basis
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of findings on page 25 of the impugned order, through which it has been recorded that the cash deposited in the Firm’s account and earlier withdrawals claimed in justification, could not be matched.
1.2
Further aggrieved, the assessee has approached the ITAT with several grounds which may be divided into two parts for the sake of convenience. Thus, ground nos. 10.1 & 10.2 pertain to challenging of the juri ictional aspect, whereby the assessee has averred that the format of notice was not as per the extant CBDT Instruction and even the notice was not issued allegedly by the juri ictional AO. However, the Ld. AR fairly mentioned at the Bar that he was not pressing these two grounds.
Accordingly, these two grounds are dismissed, as not pressed.
1.3
The second set of grounds challenge the action of Ld. CIT(A) in confirming the addition of Rs.52,00,000/- made u/s 68 of the Act.
Accordingly, it is the ground pertaining to the substantive addition that would be adjudicated through this order.
2. Before us, the Ld. AR pointed out that in this case the two partners of the assessee firm had withdrawn their shares of profits from the firm earlier and had thereafter deposited the same in the Firm’s account.
The Ld. AR took pains to point out that the two partners were persons of considerable means and they were filing returns of income showing substantial receipts. To this effect, the Ld. AR brought to our notice the ITR acknowledgements of the two partners filed in the paper book (pages
3

93 to 102). It was argued that it was a well settled principle that capital introduction by partners could at best be taxed in the hands of the partners and not in the hands of the firm. It was the further submission that in this case it is exactly this is what has been done by the authorities below in as much as both of them have considered the amounts deposited by the partners in the firm as being unexplained in the hands of the firm. In support of the argument that no addition was possible in the hands of the firm, the Ld. AR relied on the following cases:
i.
Metal & Metals of India reported in 208 CTR 457 (P&H); ii.
Coordinate Bench decision in the case of M/s Ambika Enterprises
[ITA 31/Del/2020, order dated 21/07/2023]; iii.
Coordinate Bench decision in the case of M/s Ramesh Industries vs.
ITO [ITA No.3131/Ahd/2008, order dated 21/01/2011].
Relevant portions from these orders of ITAT and the Hon’ble Punjab &
Haryana High Court were read out by the Ld. AR. In all these cases, it was pointed out thatthere was a finding that no addition was possible in the hands of the firm when the partners are seen to have deposited sums of money as introduction of capital.
2.1
The Ld. DR, on the other hand, read out from various portions of the Ld. AO’s order and from the Ld. CIT(A)’s order and argued that there was no live nexus between earlier withdrawals from the firm’s account by these two partners and the subsequent deposit of the same after a 4

gap of several years. It was also pointed out that since the cash credit was seen to be in the hands of the firm hence any addition u/s 68 of the Act would be made in the hands of the firm and not in the hands of the so-called depositors.
3. We have carefully considered the rival submissions and have gone through the records before us. We have also perused the case laws relied upon by the Ld. AR and have gone through the contents of the paper book submitted for our perusal. The admitted facts are that the impugned amounts were deposited by the two partners by way of contribution to the capital of the firms. Once this fact is established then the question remains whether any addition is possible in the hands of the firm or not. The plethora of cases relied upon by the Ld. AR clearly shows that any addition under the facts and circumstances emerging herein could be made in the hands of the individual partners only. Accordingly, there is no hesitation in holding that no addition was possible u/s 68 of the Act in the hands of the firm. The same is accordingly directed to be deleted.
4. In the result, appeal of the assessee is partly allowed.

Order pronounced in the open court on 17.12.2025 (MAHAVIR SINGH)
ACCOUNTANT MEMBER
Dated: 17.12.2025
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*Kavita Arora, Sr. P.S.