ITAT deletes Addition u/s 68 of Income Tax Act Firm not Taxable for Capital introduced by Partner ITAT deletes Addition u/s 68 of Income Tax Act Firm not Taxable for Capital introduced by Partner Chartered Accountant CA ICAI Chartered Accountants CA ICAI CAinINDIA ICAI Announcements Accounting Standards CA News ICAI Students ICAI Members Case Laws CPT IPCC Final ICAI Course CA Course ICAI Forum CA Question Papers ICAI Study Material

« ITAT-Constitution of Benches »

Open DEMAT Account in 24 hrs
Mere Securing a House on Rent in USA is not conclusive fact that Assessee is US Resident to Allow DTAA Benefit: ITAT
20 LPA Opening Hiring Qualified CA For Assurance Manager Profile
Non-Filing of Income Tax Return amounts to Escapement of Income: ITAT upholds Reassessment u/s 147
Non Appreciation of facts in true perspective: ITAT sets aside Revision Order
No Evidence of Tax Evasion by showing Fictitious or False Transactions: ITAT deletes Addition of Expenditure u/s 40A(3)
Earning Interest Income from Inter-Corporate Deposit is Business Income: ITAT
Income Tax Penalty u/s 271E cannot be levied in the absence of Regular Assessment: ITAT
ITAT deletes Addition u/s 68 of Income Tax Act Firm not Taxable for Capital introduced by Partner
Payment for Facebook Ads and Other Digital Advertising Companies not subject to TDS as per DTAA: ITAT
No Service Tax Leviable on Goods component of Composite Works Contract as VAT has been paid: CESTAT
ITAT deletes Addition on Account of Investment made from Undisclosed Sources as all Transactions were made through Banking Channels
Relief to Honda: ITAT directs AO to delete Addition on account of Capitalisation of Royalty Expenses by Holding it to be Revenue in Nature
Minimising tax liabilities by lawful means not illegal, says ITAT
Interest paid on Late Payment of Service Tax is a Deductible Business Expenditure: ITAT
ITAT upholds Addition on Account of Unaccounted Cash as no mention of Agricultural Land on Translated Document


« Income Tax Penalty u/s 271E cannot be levied in the absence...	Payment for Facebook Ads and Other Digital Advertising... »
ITAT deletes Addition u/s 68 of Income Tax Act Firm not Taxable for Capital introduced by Partner

May, 10th 2022
The Income Tax Appellate Tribunal (ITAT), Chennai bench has held that the Firm cannot made taxable for the capital introduced by the Partner as section 68 of the Income Tax Act, 1961 cannot be applicable. The Assessee, M/s. Nithyasudha Combines filed an appeal against the assessment wherein the CIT(A) granted relief to the assessee. The department approached the Tribunal against deletion of quantum addition made under section 68 of the Income Tax Act, 1961 contending that the assessee firm had filed the first return of income for the assessment year 2015-16 with a capital introduction of ₹.9.70 crores and the onus of providing the source of the said capital introduction entirely vests with the assessee. The Tribunal bench comprising Shri V. Durga Rao, Judicial Member & Shri Manoj Kumar Aggarwal, Accountant Member observed that on verification of the bank statements and other details of the partners, Smt. Nithyalakshmi and Shri Gurumurthy who have introduced capital in the assessee’s firm, the Assessing Officer has observed that the total capital introduced by the assessee are only ₹.7.30 crores, whereas, in the return of income of the assessee, being first return of income for the assessment year 2015-16, it was mentioned wrongly mentioned in the return of income and based on the return of income, the Assessing Officer has wrongly made the addition as the addition was not as per books of accounts. “Therefore, the Assessing Officer has nothing to say further on the wrong addition made, she could not confirm for hearing of the issue raised before the appellate authority,” the Tribunal said. Relying on a catena of decisions, the Tribunal observed that “the capital introduced by the partners cannot be taxed in the hands of the assessee-firm under section 68 of the Act. Under the above facts and circumstances as well as considering various case law, we are of the considered opinion that the ld. CIT(A) has fully justified in deleting the addition of ₹.2,40,00,000/- made under section 68 of the Act. Thus, the appeal filed by the Revenue is dismissed.”