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2019 (5) TMI 739 - AT - Income TaxPenalty u/s 271(1)(c) - Addition towards borrowal from friends and relatives for financing his son’s USA visa - penalty imposed by rejecting confirmations filed by the depositors on the ground that depositors were not capable of advancing such sum - HELD THAT:- The assessee was a salaried employee working with postal department. According to him, these loans were taken for the purpose of obtaining VISA for his son. He has withdrawn the money from his bank account and repaid to the creditors in cash. His explanation was not accepted in the quantum proceedings, probably he failed to substantiate his explanation, but against the order of the ITAT, appeal of the assessee stands admitted before the Hon’ble High Court. It is settled position of law that when the evidences and explanation furnished by the assessee in support of cash credits are not acceptable by the department, then addition u/s 68 can be made, but penalty u/s 271(1)(c) is not automatic. Thus, from the material available on record, we are of the view that the explanation of the assessee was not found to be false, but it could not be accepted on account of substantiation of his claim with help of some solid evidences. Therefore, it is not a fit case for visiting the assessee with penalty. We allow the appeal of the assessee
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