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2018 (1) TMI 902 - HC - Income TaxPenalty u/s 271(1)(c) - unexplained income - Held that:- Admittedly, there was an unexplained income as discernible from the records maintained by the assessee. The assessee had a duty to explain and substantiate the source of such income. The assessee has an explanation of diversion of materials as retained from an abandoned Government contract, which was not fully accepted by the Tribunal. When the explanation has not been accepted by the Tribunal in the assessment proceedings, there is no reason why in the penalty proceedings the same should be considered as a bonafide explanation, especially when there is nothing more available with the Appellate Authority considering the penalty proceedings, to substantiate such diversion. Admittedly, there was no such substantiating material produced by the assessee and available with the Tribunal at the earlier stage when the assessment proceedings were considered. In such circumstances, we are of the opinion that the addition made of computation of income as available definitely comes under Explanation 1(B) of Section 271(1). - Decided against the assessee.
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