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2017 (2) TMI 694 - AT - Income TaxPenalty u/s 271(1)(c) - Unexplained expenditure u/s 69 - Held that:- It is admitted fact that it is based upon seized document and explanation of the assessee was not found sastisfactory. The assessee explained that it is rotating capital investment by Shri J.C.Bansal which had already been declared before Settlement Commission in the amount of ₹ 30,70,000/-. However, when break-up of the same was given, amount of ₹ 94,500/- did not find mention in the same declaration. The assessee did not press this ground of appeal before the Tribunal and as such, it was dismissed and addition was confirmed. On the face of it, it is clear that assessee failed to explain this issue and whatever explanation was offered, was not substantiated through any evidence or material on record. Therefore, Explanation-1 to Section 271(1)(c) of the Act is clearly attracted in the case of the assessee. The authorities below were, therefore, justified in levying the penalty under section 271(1)(c) of the Act against the assessee on this addition. Addition on account of undisclosed income - Held that:- Receipts produced on record clearly show that almost all the payments which were due upon Shri Rahul Chhabra have been received by assessee in subsequent years. Therefore, there is no question of any amount of ₹ 5 lcs paid by Shri Rahul Chhabra in cash. Thus, the assessee is able to explain at this stage that no amount of ₹ 5 lacs was paid in cash by Shri Rahul Chhabra, otherwise there was no reason to make balance payment in subsequent assessment years. It would, therefore, clearly make out that assessee offered explanation which is supported by evidences and material on record that no cash of ₹ 5 lacs have been paid and that explanation of the assessee has been substantiated through evidence and material on record. The explanation of the assessee appears to be bonafide. Therefore, it is not a fit case of levy of penalty on this addition.
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