Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, VISAKHAPATNAM “SMC” BENCH, VISAKHAPATNAM
Before: SHRI DUVVURU RL REDDY, HON’BLE
अपीलधथी की ओर से/ Appellant by : Shri I Kama Sastry, AR प्रत्यधथी की ओर से / Respondent by : Dr.Aparna Villuri, DR सुनवधई की तधरीख / Date of Hearing : 21.03.2024 घोर्णध की तधरीख/Date of Pronouncement : 27.03.2024 आदेश /O R D E R
Per Shri Duvvuru RL Reddy, Judicial Member :
This appeal is filed by the assessee against the order of Commissioner of Income Tax (Appeals) [CIT(A)], Mumbai vide DIN & Order No. ITBA/APL/S/250/2023-24/1057489741(1) dated 30.10.2023, arising out of order passed u/s 143(3) of the Income Tax Act, 1961 (in short ‘Act’) dated 30.12.2019 for the Assessment Year (A.Y.) 2017-18.
Brief facts of the case are that the assessee is a partnership firm running a gas agency of Bharat Gas. The assessment was completed u/s 143(3) of the Act for the A.Y.2017-18 and the Assessing Officer (AO)
Sri Venkateswara Bharat Gas Grameena Vitrak, Srikakulam passed order dated 30.12.2019 by making an addition of Rs.3,50,000/- on account of additional capital introduced by the partners.
On being aggrieved, the assessee preferred an appeal before the CIT(A) and the Ld.CIT(A) after considering the submissions of the assessee, confirmed the addition made by the AO, saying that there is a big difference in the closing books of the firm and the capital account of the partners and the source for introduction of capital of Rs.1,00,000/- and Rs.2,50,000/- by Sahukara Jaya Sri and Sahukara Venkata Ramana respectively on 03.05.2016 by way of cash also could not be established by the assessee.
On being aggrieved, the assessee preferred an appeal before the Tribunal by raising the following grounds of appeal :
1. The Ld.Assessing Officer is not justified in taxing an amount of Rs.3,50,000/- as unexplained cash credit under section 68 in the hands of the firm, whereas the same is capital introduced by the partners of the firm. The Ld.Addl.CIT(A)-2, Mumbai is not justified in confirming the same ground.
2. The appellant craves leave to add or alter, amend, modify all or any of the above grounds of appeal.
5. It was the only submission of the assessee is that the AO made addition saying that the assessee has not withdrawn any amount from the capital of the firm before introduction of capital and the Ld.CIT(A) sustained the addition on the same reasons. He further submitted that Sri Venkateswara Bharat Gas Grameena Vitrak, Srikakulam the partners of the firm are also having other sources of income and they have regularly filed the returns of income. They have introduced Rs.1,00,000/- and Rs.2,50,000/- aggregating to Rs.3,50,000/- and there is no need to withdraw cash from the firm account for introduction of addition capital of Rs.3,50,000/-. Therefore, he pleaded to set aside the orders passed by the revenue authorities and allow the appeal of the assessee.
6. Per contra, the Ld.DR relied on the order of the Ld.CIT(A). The Ld.DR pleaded to uphold the order passed by the Ld.CIT(A) and dismiss the appeal of the assessee.
7. I have heard both the parties and perused the material available on record. It is a fact that the partners of the firm have introduced an amount of Rs.3,50,000/- as additional capital in the firm. It is apparent from the records that the assessee regularly filed the returns of income. It is also an admitted fact that the partners of the firm are having other sources of income and introduced capital of Rs.1,00,000/- and Rs.2,50,000/- respectively. Therefore, considering the other sources of income of the partners of the firm, introduction of capital Rs.3,50,000/- is genuine. Therefore, I direct the AO to delete the addition made by the AO Sri Venkateswara Bharat Gas Grameena Vitrak, Srikakulam in the hands of the firm. Accordingly, the grounds raised by the assessee are allowed.
In the result, appeal of the assessee is allowed.
Order pronounced in the open court on 27th March, 2024. (दुव्वूरु आर.एल रेड्डी) (DUVVURU RL REDDY) न्याधयक सदस्य/JUDICIAL MEMBER Dated : 27.03.2024 L.Rama, SPS