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2015 (8) TMI 1517 - ITAT INDORELevy of penalty u/s 271(1)(c) - Failure to prove opening capital - The assessee has offered this income during the course of assessment proceedings to buy mental peace and non-imposition of penalty. The assessee was given sufficient opportunity to explain the opening capital. Assessee has voluntarily admitted the income of undisclosed sources. - HELD THAT:- As per the provisions 2 to Explanation 1(B) now the entire onus is on the assessee to not only offer an explanation but also to substantiate it and to prove that the presumption was bona fide. At the same time the presumption so raised by the Explanation 1 is rebuttable. The effect is that unless and until rebuts the presumption, he would be liable to penalty u/s 271(1)(c) of the Income-tax Act, 1961. It is now established law that presumption would not stand rebutted merely by furnishing any general or fantastic or fanciful or unreasonable explanation by the assessee, the explanation should be based on cogent and relevant material and should be accepted to the authorities. We find from the explanation of the assessee that the assessee has tried to explain the facts, but the assessee could not prove this amount before the AO. WE find that similar issue had come up before the Hon'ble A.P. High Court in the case of Chennupatti Tyres & Rubber Products [2014 (11) TMI 510 - ANDHRA PRADESH HIGH COURT], wherein the penalty was deleted. The Hon'ble Andhra Pradesh High Court has discussed the decision of Mak Data Mak Data Private Limited vs. CIT, [2013 (11) TMI 14 - SUPREME COURT] and after considering the decision of Mak Data, deleted the penalty. Penalty deleted - Decided in favor of assessee.
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