Hrishika Logistics Vs ACIT (ITAT Mumbai)
Background: Hrishika Logistics was a partnership firm engaged in the business of logistics, clearing services & freight forwarding. It was constituted on 06.05.2011, making AY 2012-13 its first year of business.
During the year, two partners introduced capital into the firm. Mr. Manish Vaswani introduced ₹37,91,744, while Ms. Deepti Vaswani introduced ₹5 lakh.
The AO treated the entire partners’ capital as unexplained cash credits u/s 68. During the first appellate proceedings, the CIT(A) accepted ₹34,93,044 out of the capital introduced by Mr. Manish Vaswani. However, the balance amount of ₹2,98,700 was sustained because adequate supporting evidence was allegedly not furnished during assessment.
The CIT(A) also sustained the addition of ₹5 lakh representing capital introduced by Ms. Deepti Vaswani. Thus, the total addition surviving before the Tribunal was ₹7,98,700.
Furniture Introduced as Capital
The disputed amount of ₹2,98,700 introduced by Mr. Manish Vaswani did not represent an unexplained cash deposit. It represented the value of his personal furniture & fixtures brought into the partnership firm as capital.
The assets were used wholly for the firm’s business, recorded in its books & included in the relevant block of assets. The firm also claimed depreciation upon them.
