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ITAT Mumbai: Partner Capital Not Taxable u/s 68; Source Not Firm’s Burden; ₹19.06 Cr Addition Deleted
Case Law Details
- Case Name
- MKF International Vs DCIT (ITAT Mumbai)
- Appeal Number
- Only available for paid members
- Date of Judgement/Order
- Only available for paid members
- Related Assessment Year
- 2018-19
- Courts
- All ITAT, ITAT Mumbai
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MKF International Vs DCIT (ITAT Mumbai)
Partner Capital Not Taxable U/s 68 in Firm’s Hands – Source of Partner Funds Not Firm’s Burden – ₹19.06 Cr Addition Deleted – ITAT Mumbai
The AO treated capital contribution of ₹19.06 Cr introduced by partners (including NRI partners) as unexplained cash credit u/s 68 and taxed it u/s 115BBE, alleging failure to explain the ultimate source of foreign remittances. CIT(A) confirmed the addition.
ITAT held that capital introduced by partners stands on a different legal footing from loans or share capital. Once identity of partners, confirmatio...
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