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TMI Blog1994 (7) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... n respect of a credit in the name of Smt. Sudha B. Patil of Ahmedabad. Assessee had claimed to have received a sum of Rs. 25,000 from the said creditor by means of a demand draft on24th March, 1983, drawn on United Commercial Bank through one Mr. Bharat Solanki. Similarly, loans of Rs. 25,000 each was claimed to have been received from Shri Paresh M. Patil, Smt. Preeti M. Patil and Mrs. Vimla M. Patil, who are related to Smt. Sudha B. Patil. Assessing Officer had accepted the loans in the case of Shri Prakash M. Patil and Mrs. Preeti M. Patil as genuine. In the case of Vimla M. Patil and Mrs. Sudha B. Patil, the loans were not accepted as genuine and accordingly an addition of Rs. 50,000 was made by invoking provisions of s. 68 and by treat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appeal was decided. He accordingly proceeded to impose penalty of Rs. 17,200. Assessee appealed to the CIT(A) and he claimed that Smt. Sudha B. Patil had developed strained relations with her in laws, namely, Patils after advancing the loan of Rs. 25,000 and had left the house. The divorce suit was pending in the Court of law. In these circumstances it became difficult for the assessee to contact the lady and obtain the confirmation. However, at a later stage assessee was able to obtain affidavit confirming the advancing of loan of Rs. 25,000 free of interest. The lady had confirmed to have advanced the loan after making withdrawals out of accumulated balance in her savings bank account. Photostat copy of the bank statement had also bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing Officer for reasons beyond his control, Mrs. Sudha B. Patil having developed strained relations with her husband and she having left the house of her in laws. Later on assessee was able to procure an affidavit of the creditor which was not admitted in assessment proceedings on a technical ground that the same should have been filed before the Assessing Officer. According to Dr. Narayanan, in penalty proceedings fresh evidence is permissible to be filed. Therefore, there was no bar for consideration of the affidavit and other evidence furnished by the assessee in penalty proceedings. The learned counsel further pointed out that the CIT(A) has in fact considered the affidavit and photocopy of the bank statement of the assessee which crea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim was bona fide, it could not be held to be false. According to the learned counsel, there was some inconsistency in the stand of the assessee in the case of Devi Dayal Aluminium Industries and even then their Lordships of the Allahabad High Court have held that it could not render the claim of the assessee as false. According to Dr. Narayanan the bona fides of the assessee are established and as such Explanation to s. 271(1)(c) was not to be invoked in this case. 4. Relying upon the decision of the Delhi High Court in the case of CIT vs. Narang & Co. (1975) 98 ITR 462 (Del) learned counsel contended that under Explanation to s. 271(1)(c) the onus of proof has been placed on the assessee. However, he would have taken to have discharged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit in the assessment proceedings, it would be open to him in the penalty proceedings to offer explanation on the basis of fresh material. This view is supported by the decision of the Delhi High Court in the case of Narang & Co. In this case a perusal of the appellate order reveals that in penalty proceedings affidavit of the creditor was on record. The fact that the amount of Rs. 25,000 had been received by the assessee from Mrs. Sudha B. Patel by means of the account payee demand draft No. 502952 dt.24th March, 1983drawn on United Commercial Bank has not been controverted by any evidence. The Revenue authorities have not attempted to verify the contents of affidavit. The creditor has claimed to have advanced the money out of her savin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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