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2021 (6) TMI 175 - AT - Income TaxPenalty u/s 271(1)(c) - additions as unexplained cash deposited in his bank account and non-disclosure of bank interest - HELD THAT:- As gone through the bank statement. It is duly reflected that in the month of April, he has given advance of roughly ₹ 14 lakhs. Thereafter, in the month of September and October, ₹ 14 lakhs has been deposited in his account. To some extent, the explanation of the assessee is plausible that he has given advance for purchase of the property which was not materialized and received back the amount during the year itself. The only deficiency in his explanation was that he could not buttress this explanation with supporting evidence i.e. confirmation from two persons viz. T. Ramkrishna & S. Bhaskara Rao. Thus he failed to explain the source with support of evidence, but his explanation was not found to be false. The lapse committed at his end may authorise the AO to make addition, but that will not authorise the AO to visit the assessee with penalty. The explanation of the assessee ought to have been found as false by the AO. Nothing that sort of exercise has been made or any material discernible from the record. As far as interest part is concerned, it is a very small amount. There might have some minor discrepancy while calculating the interest at the time of filing of the return. Considering all these aspects, the assessee does not deserve to be visited with penalty. Appeal of the assessee is allowed.
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