Capital introduced by partners cannot be taxed in the hands of firm

Advertisement ITO Vs Nithyasudha Combines (ITAT Chennai) The next point for consideration is whether the unexplained partners’ capital is assessable in the hands of the assessee or not in terms of section 68 of the Act. Section 68 of the Act can be invoked only when there is a credit in the books of account maintained by the assessee. However, in the present case, no credit was recorded in the books of accounts of the assessee firm. During the course of appellate proceedings, the ld. CIT(A) has called for assessment records and observed that during the course of scrutiny assessment proc...