ITO Vs Jaikishan Textile Traders LLP (ITAT Pune)
The Revenue appealed against the order of the NFAC, Delhi dated 17-05-2023 for AY 2018-19, by which the addition of Rs.29,61,06,768/- made under Section 68 of the Income Tax Act, 1961 was deleted. The Revenue contended that the assessee had failed to establish the nature and source of capital introduced by its partners and that the CIT(A) / NFAC had improperly relied upon evidence allegedly furnished for the first time during appellate proceedings in violation of Rule 46A of the Income Tax Rules, 1962. The Revenue also contended that opportunities had been provided during assessment proceedings but the assessee had failed to satisfactorily explain the credits.
Before the Tribunal, the assessee disputed that any additional evidence had been filed before the CIT(A) / NFAC. It submitted a paper book running into 474 pages, with certification that the relevant material had already been placed before the lower authorities. The assessee referred to pages 466 onwards of the paper book, containing material relating to replies filed between 13.10.2019 and 12.04.2021, and also referred to the corresponding show cause notices issued by the Assessing Officer.
The assessee further submitted that the assessment itself recorded that the amount of Rs.29.61 crores assessed under Section 68 represented capital introduced by the two partners, Shri Prakash Jaikishan Vyas and Shri Vikas Jaikishan Vyas, amounting to Rs.5,34,10,500/- and Rs.24,26,96,268/- respectively. Since the LLP had been established during the relevant previous year and the credits represented capital introduced by its partners, the assessee contended that the amount could not be treated as unexplained cash credit in the hands of the LLP. The assessee relied upon Kapil Alcotech LLP vs. DCIT, ITA No.557/PUN/2024, order dated 09.08.2024.
