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2015 (9) TMI 1469 - ITAT DELHIPenalty u/s 271(1)(c) - Addition u/s 68 - Held that:- Failure of M/s G.R. Overseas to appear before the Assessing Officer after denying the payment had a most crucial angle which the Assessing Officer simplistically ignored’. The above recording amply proves that the assessee did require the cross examination of M/s G.R. Overseas, which has eventually not taken place. As regards the other two parties, the assessee contended that they were small parties, whose whereabouts were not ascertainable. This has again not been demolished by the AO. These circumstances need to be seen in the backdrop of the fact that the amounts were in fact, receivable from these trade debtors. The above discussion divulges that the explanation given by the assessee for receipt of the amount from its old debtors has not been disproved by the AO. Though the assessee could not satisfactorily explain the receipt of cash from these three parties, the fact that this amount was actually receivable, which was claimed to have been received during the year, goes to show that the explanation of the assessee about the receipt of such amount was a possible one albeit not satisfactory. The Tribunal has also noticed in the quantum order that: ‘it was obligatory on its part to produce the parties or give their proper addresses to the Department.’ It further observed that: ‘it failed to discharge its burden cast by section 68.’ The above observations of the Tribunal along with the position as discussed above, makes it clear that though the addition u/s 68 was properly made as has also been confirmed by the Tribunal because of unsatisfactory explanation given by the assessee in support of the receipt of the amounts, but, it is not a good case for imposition of penalty because it relates to lack of tendering explanation to the satisfaction of the AO and not disproving the contention of the assessee about the genuineness of receipts. We, therefore, order for the deletion of penalty. - Decided in favour of assessee.
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