TMI Blog1988 (3) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... a discussion of the whole matter and after looking into the accounts, the departmental officers came to the conclusion that stock in possession of the two firms to the extent of Rs. 4,41,000 were not explainable. The residences of the partners of the two firms were also searched on the abovementioned dates and cash amounting to Rs. 1,35,131 was found. In addition, the officers calculated that out of the amount of the cash lying in the shop premises Rs. 7,438 was the excess cash on the said date. It was also found that the amount of Rs. 30,000 deposited in the Allahabad Bank on20-7-1979was also not found entered in the books of account. Thus, a total sum of Rs. 1,72,569 (Rs. 1,35,131+ Rs. 30,000+Rs. 7,438) was considered unexplainable. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Moti Lal 2,500 (10) Sunder Lal Sons 2,500 ------------------- Total 21,600 --------------------- In the cases of all these cash credits no confirmations were filed by the assessees. The matter was taken by these assessees to the CIT(A) who reduced the addition of Rs. 21,600 to Rs. 4,700. However in further appeal, the Appellate Tribunal vide its order dated4-6-1982in ITA No. 1318/Del/82, restored the addition of Rs. 21,600. In the case of M/s. RSPC also, according to the settlement with the CIT, the assessee was to add in the amount of Rs. 1,53,410 for this assessment year. In the case of this assessee, the assessment was completed by the ITO on an income of Rs. 1,91,777 which included the cash credits amounting to Rs. 26,500 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... explained cash credits were made due to the inability of the assessees to furnish confirmations and that those confirmations could not be furnished because parties were not available at the time of the assessment proceedings. It was also said that all material facts, information and explanations had been furnished in a bona fide manner without any fraud or gross or willful neglect on the part of the assessees. However, the ITO did not accept the explanation of the assessees and he levied penalties amounting to Rs. 77,680 and Rs. 81,210 in the cases of these two firms @ 100 per cent of the tax sought to be evaded, treating these firms as URF. This was done not only with reference to the addition by way of unexplained cash credits but also wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 271(1)(c). Reliance was also placed by him on the decision of the Hon'ble Kerala High Court in the case of CIT v. Pawan Kumar Dalmia [1987] 168 ITR 1. 5. We have considered the rival submissions as also the decisions referred to above. The assessment year involved is 1980-81 and therefore, in terms of Explanation 1(B) to section 271(1)(c) as operative for the A.Y. in question, it is to be seen whether the explanation furnished by the assessees was bona fide and all the facts relating to the same and material to the computation of their total incomes had been disclosed by them. The copies of the settlement petitions filed by these firms show that they had specifically mentioned that no penalties u/s. 271(1)(c) were to be levied. The depart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come if there was nothing to show that the plea of the assessee was false or inherently not possible. In these cases as we have already seen so far as the amounts returned by the assessees in their returns in accordance with the settlement are concerned, no concealment could be said to be involved as the amounts were mentioned in the returns and no revised returns were filed. In fact nothing happened in regard thereto after the filing of the return nor any detection was made by the ITO after the filing of the returns. Therefore, no penalties were leviable with reference to these amounts. So far as the additions by way of unexplained cash credits are concerned, those additions were made due to the want of evidence produced by the assessees t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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