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2014 (1) TMI 441 - AT - Income TaxImposition of penalty u/s 271(1)(c) of the Act – Held that:- Regarding unsecured loan in both years, the assessee has not even made an attempt to fulfill the requirement of law by establishing the identity and creditworthiness of the loan creditors and genuineness of the transaction - There is one more addition, i.e., regarding unaccounted income credited by the assessee and not declared the same for tax purpose and similarly the assessee had negative cash balance in Assessment Year 2008-09 shown under that head in Balance sheet without including the same in the income of the assessee - There is no explanation of the assessee as to how the penalty is not leviable and there is a clear cut case of concealment of income as well as furnishing of inaccurate particulars of income - As per explanation 1 to Section 271(1), if the explanation is given, which is not found to be false and some other conditions are fulfilled by the assessee, it can be said that 271(1)(c) is not applicable - no explanation is given by the assessee – Thus, Section 271(1)(c) is clearly applicable – Decided against Assessee. Applicability of Section 41(1) of the Act – Held that:- Penalty in respect of this addition is not justified because such liability is appearing in the balance sheet of the assessee - it cannot be said that the liability has conclusively ceased to exist and hence although the addition is not in dispute - it does not amount to concealment – Thus, Penalty invoking the provision of Section 41(1) of the IT Act set aside – decided in faovur of Assessee.
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