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2014 (2) TMI 509 - AT - Income TaxDeletion of Penalty u/s 271(1)(c) of the Act – Whether the addition could be treated as unexplained cash credits – Held that:- The decision in Shri Prakash K. Patel Prop. Pakash Plastics Versus Income Tax Officer [2010 (12) TMI 1083 - ITAT AHMEDABAD] followed - The penalty levied on the addition does not survive, thus, the same is deleted - In respect of addition - the addition on the basis that capacity of creditworthiness of the donor could not be established - assessee contended that there is no dispute with regard to genuineness and identity of the donor - The CIT(A) deleted the addition on the basis that provisions of section 68 of the Act creates a legal fiction and fiction created by such provision are only for the limited purpose of assessment and the same cannot be made applicable u/s.271(1)(c) of the Act - Mere operation of the fiction in the quantum proceedings does not by itself justify the levy of penalty - the only reason why the additions have been confirmed is the failure of the assessee in proving the creditworthiness of the donors which is material in so far as quantum assessment proceedings are concerned and not in case of penalty proceedings - there is no infirmity in the finding of CIT(A) and the order is upheld – Decided against Revenue.
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