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Income Tax Appellate Tribunal, ‘B’ /SMC BENCH, CHENNAI
Before: SHRI MAHAVIR SINGH, VICE-
आदेश / O R D E R
This appeal filed by the assessee is arising out of order of
the Commissioner of Income Tax (Appeals), National Faceless
Appeal Centre (NFAC), Delhi vide appeal No.
ITBA/APL/S/250/2023-24 / 1056954787(1) dated 10.10.2023.
The assessment was framed by the Income Tax Officer, Ward -
1(1), Krishnagiri for the assessment year 2006-07 u/s. 143(3)
of the Income Tax Act, 1961 (hereinafter ‘the Act”) vide order
dated 30.12.2008. The sole grievance of the assessee is
confirmation of addition of Rs.15 Lacs which represent capital
contribution by two partners to the assessee firm.
During assessment proceedings, the assessee was
directed to prove the source of capital contribution of Rs.15
2 ITA No. 1448/Chny/2023
Lacs, Rs.13.50 Lacs & Rs.1.50 Lacs as contributed by its three
partners viz. M. Ameer Jan, Zafreen Zehra and Mir Athar Ali.
One of the partners M. Ameer Jan submitted that the same was
sourced out of gift received. The same was accepted. However,
the other two partners denied having made any capital
contribution. The same resulted into addition of Rs.15 Lacs in
the hands of the assessee.
During appellate proceedings, the assessee submitted
that addition, if any, was to be assessed in the hands of the partners. However, this argument was rejected by Ld. CIT(A)
and the assessment was confirmed against which the assessee
is in further appeal before me.
The Ld. AR, inter-alia, argued that the impugned capital
has been introduced in AY 2005-06 and therefore, this addition
could not be sustained in this year. The Ld. AR also argued that
the source for the firm was capital contribution and the addition,
if any, has to be made only in the hands of the partners.
Finding substance in both the pleas of Ld. AR, I direct Ld.
AO to reconsider this issue in the light of arguments made before me. If the capital has been introduced in AY 2005-06, no
such addition could be made in this year. Secondly, Ld. AO
3 ITA No. 1448/Chny/2023
may also consider assessability of the same in the hands of the
assessee-firm after affording opportunity of hearing to the
assessee. The assessee is expected only to prove the source
and not source of source in this year.
The appeal stand allowed for statistical purposes.
Order pronounced in the open court on 21st February, 2024 Sd/- (महावीर �संह) (Mahavir Singh) उपा�य�/ Vice-President चे$नई/Chennai, %दनांक/Dated 21.02.2024 DS
आदेश क� ��त)ल*प अ+े*षत/Copy to: 1.Appellant 2. Respondent 3. आयकर आयु,त/CIT 4. *वभागीय ��त�न/ध/DR 5. गाड� फाईल/GF.