Unexplained Partner Capital Cannot Be Added to Firm’s Income: ITAT Hyderabad

Spa constructions Vs ITO (ITAT Hyderabad) ITAT Hyderabad: Capital Introduced by Partners Not Taxable in Firm—If at All Taxable, It Must Be Assessed in the Partner’s Hands The Tribunal examined the addition of Rs.3,26,91,139/- under section 69A r.w.s. 115BBE made on account of “capital introduced by partners.” Upon evaluating the registered sale deeds, partners’ capital accounts, and bank statements, it was found that substantial payments towards purchase of land from Smt. D. Poojitha were directly made by the partners and duly credited through journal entries, rendering the AO’s fa...