TMI Blog1981 (10) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... ,940, in which main addition of Rs. 25,000 has been made and accepted by the assessee. In his assessment for the year 1973-74, an addition of Rs. 25,000 was made on account of introduction of cash shown in the statement of affairs submitted during the course of assessment proceedings. A copy of such statement has been submitted at page 3 of the assessee's paperbook. The assessee explained source in his letter dt. 29th October, 1975, which is given at pages 4 and 5 of the paperbook. The explanation was that the assessee had amounts lying with him which could be directly related to intangible additions made in the earlier years and a sum of Rs. 50,959 was stated to be so available for adjustment. According to the assessee, similar benefits ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee that there has been no concealment of income on the part of the assessee when he like in the earlier years, filed his statement of affairs and cash of Rs. 25,000 was clearly projected from such statement. Sh. D.K. Gupta very forcefully argued that it was merely a case where the assessee's explanation was found to be unsatisfactory and the benefits of intangible addition, though given in the earlier years, came to be denied. Further, he submitted that there is no finding recorded in the assessment order that there was concealment of income on the part of the assessee. He argued, such finding simply could not have been recorded because of protective addition and not that there was any mistake in this regard. He pleaded that when protective ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rightly entitled the assessing officer to subject to tax Rs. 25,000 as unproved excess cash but the penalty u/s. 271(1)(c) of the Act is a different matter. The assessee did offer a plausable explanation for cash of Rs. 25,000 though the ITO was well within his right to reject the explanation as not conclusive. The assessee has been subjected to tax from the asst. yr. 1955-56 and the following graphical chart would indicate the declared and the assessed income upto the year 1970-71: Asst. yr. Income declared Income assessed. 1955-56 2,000 7,500 1956-57 2,000 7,500 1957-58 2,000 7,500 1958-59 2,400 6,834 1959-60 2,400 167 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g only protective addition in the original assessment, we are inclined to accept Sh. Gupta's contention that the very charge of concealing particulars of income could not there and, therefore in the absence of satisfaction having been recorded by the ITO in the course of assessment proceedings, the very initiation of penalty proceedings were bad. 9. As far the Explanation to s. 271(1)(c) of the Act, the ITO did not require the assessee to discharge his onus because as is clear from the order passed u/s. 271 (1)(c) of the Act, the penalty was levied simply because the addition was made in the assessment and which came to be accepted by the assessee. In any case, explanation offered by the assessee in the course of penalty proceedings were ..... X X X X Extracts X X X X X X X X Extracts X X X X
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