Addition u/s. 68 justified for Capital introduced by partner in assessee firm from sale of agricultural land with No documentary evidence to substantiate sale

We are concerned with the second part of section 68 of the Act, because an explanation has been offered by the assessee in the present matter that the sum entered as cash entry to the credit of the account of the partner was derived from the sale of agricultural land by the Hindu undivided family for the said partner. It is clear that a mere explanation is not sufficient to dis­charge the onus of the assessee under section 68 of the Act. The explanation must also be supported by certain documents regarding its genuineness.

In the present matter, since the stand taken was that the amounts had been derived from the sale of agricultural land, the sale deed with regard to such sale was asked by the assessing officer and the assessee clearly failed to produce the sale deeds and no other cogent document or evidence could be produced by the assessee to satisfy the assessing officer that the part­ner of the assessee was in a position to contribute such an amount in cash to the assessee- firm.

Full Text of the Judgment is as follows:-

1. Heard learned counsel for the appellants and learned senior standing counsel for the Income Tax Department.

2. Both the appeals had been admitted by the common order dated 6-4-2012 and the following substantial questions of law were framed while admitting them :–

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