TMI Blog1981 (4) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, it was not possible for the assessee to produce before the ITO any direct evidence. The assessee, however produced Shri Nepal Singh, a close relation of the creditor, to whom the amount in question had been paid back alongwith interest. Shri Nepal Singh admitted in his affidavit before the ITO and also in the statement which was recorded by the ITO that the said amount had been advanced and it was also received back by him and he had utilised the amount for his own personal purpose. ITO examined one of the partners of the firm also by name Shri Rajpal Singh who also stated that the loan was a genuine one. ITO however, felt that the source of the amount in question had not been explained satisfactorily and he included it in the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uct was fraudulent or contumacious or that the amount in question represented the assessee's own income which had been suppressed. The ld. AAC came to the conclusion that it was not a fit case for levy of penalty and hence the penalty was cancelled. 4. Revenue has come up in appeal. It is urged by the ld. D.R. relying upon the Allahabad High Court decision in (1979) 116 ITR 436 and 468 (All) that it was a clear case in which the explanation to s. 271(1)(c) was applicable, therefore, the onus was on the assessee to show that the difference between the income returned and the income assessed was not due to fraud or gross or wilful neglect. This the assessee had failed to do. Even the Tribunal, it was urged by the ld. D.R. had upheld the ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 's own concealed income. Even if the explanation given is found to be un-statisfactory or false, if there is mere rejection of the explanation by the ITO and nothing more, penalty under s. 271(1)(c) does not become leviable. Similarly, in the cases in which the explanation to s. 271(1)(c) applies, it has to be seen on an over all view of the facts whether it could be said that the assessee was guilty of fraud or of goes for wilful neglect. The facts of the present case have to be considered in the light of these. The assessee had given plausible explanation for the cash credit. The money was stated to be a loan from Shri Rasaloo, an ex-military man who was running a grocery shop in the village. Proper entries existed in the assessee's books ..... X X X X Extracts X X X X X X X X Extracts X X X X
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