Itta/298/2015 Of The Commissioner Of Income Tax v. Srimantha Granites

THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN AND THE HON’BLR SRI JUSTICE M.SATYANARAYANA MURTHY I.T.T.A.NO.298 OF 2015 JUDGMENT:{Per the Hon’ble Sri Justice Ramesh Ranganathan} This appeal, under Section 260A of the Income Tax Act, 1961 (“the Act” for brevity),is preferred by the Revenue against the order passed by the Income Tax AppellateTribunal, Hyderabad (Tribunal), in I.T.A.No.227/Hyd/2013 dated 03.01.2014. ITA.No.227 of 2013 was filed by the Revenue aggrieved by the order of the CIT(Appeals) holding that the cash credits in the books of accounts of the partnershipfirm could not be held to be unexplained as the partners had admitted to havinginvested the said amounts in the firm. In the order under appeal, the Tribunal heldthat, from out of eight partners who had invested Rs.22.5 lakhs for the assessmentyear 2005-06 and Rs.37,46,000/- for the assessment year 2007-08, three partnerswere staying in the USA whose source of funds had been explained; the other fivepartners were assessed to tax in the same jurisdiction of the Assessing Officer; asseen from the records they appeared to have filing returns; on the facts of the case,there was no need to make addition in the hands of the firm, when all the partnershad owned up to the funds, and had explained the credits; as far as the firm wasconcerned, the credits were from identified persons who had filed confirmationletters, and had shown the investment in their personal returns; treating theinvestment made by the partners, as unexplained was not proper; if the AssessingOfficer had any doubt about the source of funds of the partners, he should havecaused enquiries in the hands of the individual partners; as far as the firm wasconcerned, the credits in the accounts stood explained as the amounts wereinvested by the partners who had accepted the investments; and the source could,therefore, not be considered in the hands of the assessee. The appeal wasdismissed. The finding arrived at by the Tribunal, is that the cash credits in the books ofaccounts of the partnership firm could not be treated as unexplained since thepartners were identified and while three of the partners who were staying in the USA had explained their source of funds, the other five, who were assessees in thejurisdiction of the very same Assessing Officer, have been filing their returns. If thesource of funds by each of the partners is not explained by them, these credits mustbe treated as unexplained in their hands, and not in the hands of the partnershipfirm. The finding recorded by the Tribunal, in the order under appeal, is neitherperverse nor is it based on no evidence. No question of law, much less a substantialquestion of law, arises for consideration in this appeal necessitating interferenceunder Section 260A of the Act. The appeal is, accordingly, dismissed. There shall be no order as to costs.Miscellaneous petitions, if any, pending shall stand dismissed. _______________________ (RAMESH RANGANATHAN, J) ___________________________ (M.SATYANARAYANA MURTHY, J) 5[th] November 2015 RRB