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| The Tax Publishers2020 TaxPub(DT) 1855 (All-HC) : (2020) 315 CTR 0815 : (2020) 274 TAXMAN 0025 INCOME TAX ACT, 1961
Section 68
Source of deposits made by partners with assessee-firm in their capital accounts was duly explained being agricultural income in their personal returns of the past years which stood accepted by department as such and in the event AO was not satisfied, addition under section 68 could have been considered in the hands of partners and not in the hands of assessee-firm, since burdern of proving source of the credits was sufficiently discharged.
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Income from undisclosed sources - Addition under section 68 - Deposits made by partners with assessee-firm in their capital accounts - Assessee duly proved the source of credit
AO treated deposits made by partners with assessee-firm in their capital accounts as unexplained credit under section 68 on the ground that assessee was not able to prove the source of income of partners.Held: Partners had shown agricultural income in their personal returns of the past years which stood accepted by department as such. The partners were all identifiable and separately assessed to tax. Thus, source of investment having been explained, in the event AO was not satisfied, addition could have been considered in the hands of partners and not in the hands of assessee-firm, since burdern of proving source of the credits was sufficiently discharged.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 1999-2000
IN THE ALLAHABAD HIGH COURT
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