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2010 (5) TMI 583 - AT - Income TaxPenalty - Addition - Unexplained creditor - The assessee did not furnish details like confirmation from that other party and period corresponding to purchase of yarn, or placing of order or dispute for recovery - The claim of the assessee was not supported with evidence inasmuch as he was unable to produce evidence about the nature of meetings and the persons who attended the meeting - The fact of incurring of expenditure was not doubted but what was doubted was the business purpose of the expenditure - the penalty in respect of addition of Rs.90,000 is deleted Even though onus of the assessee during the assessment proceedings is confined to submitting evidence regarding identity of the creditor, creditworthiness of the creditor and genuineness of the transaction - No party having paid money to the assessee for purchase of the goods would forgo its money if it cancels the order - There is nothing to show that the details of the funds as claimed by the assessee have actually come from the alleged purchaser or of alleged transaction or of allege failure of the transaction - Thus the explanation furnished by the assessee cannot be treated as bona fide Regarding the third condition that all the facts relating to the explanation and computation of income has been disclosed by the assessee - in the present case details of the identity of the creditor or of the broker or of the terms and conditions of the purchase or of attempts to import the goods from Singapore, or of attempt to return the money and or, of attempt to settle the dispute have not been provided - penalty is leviable under Explanation 1(B) to Sec. 271(1)(c) in respect of addition of Rs.7 lakh - In the result, appeal filed by the assessee is partly allowed
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