TMI Blog1981 (2) TMI 123X X X X Extracts X X X X X X X X Extracts X X X X ..... he original assessment order made under s. 143(3) dt. 31st March, 1973 (as per demand notice). 3. The learned AAC is not justified in confirming the penalty order as the learned ITO in his penalty order under s. 271(1)(c) itself stated that "failure to explain the cash credit by itself does not prove the amount represents the concealed income of the assessee". 4. The learned AAC is not justified in confirming the penalty order as the penalty was not properly calculated as per provisions of s. 271(1)(c) of IT Act, 1961, and violated provisions chapter 1 of the IT Act, 1961. 5. The learned AAC is not justified in confirming the penalty order as no penalty for deemed concealment within the meaning of Explanation to s. 271(1)(c) could be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above credits represented income of the assessee from undisclosed sources. 4. On appeal by the assessee, the AAC vide his order dt. 12th July, 1974 set aside the assessment order of the ITO with a direction to make the assessment afresh after giving an opportunity to the assessee to furnish explanation and evidences in support of the cash credits. The ITO accordingly made the assessment under s. 143 r/w s. 251, that is in pursuance of the direction given by the AAC as mentioned above. In the reframed assessment order, it is seen that the ITO accepted the genuineness of the loan in the name of Mrs. N. Bora who is the wife of the assessee. But in respect of credit in the name of Shri S.P. Sharma the ITO noted that no evidence whatsoeve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax on it. The ITO further went on to say that it was of course true that the failure to explain the cash credit by itself does not prove the amount to be the concealed income of the assessee, and that the facts and materials collected in course of the assessment proceedings amply show that the creditor has no capacity to advance the loan and he had never been assessed to tax. The ITO observed that it has to be borne in mind that a person who could advance Rs. 25,000 without security to the assessee, would not simply be untraceable subsequently. The ITO noted in the penalty order that the authorised representative of the assessee has stated that the addition of this amount in the assessment had to be accepted as no evidence could be produc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income, was not the income of the assessee and the said amount was not treated as wealth in completing the wealth-tax assessment of the assessee for the year under consideration. Papers connected with the wealth-tax matters were also placed before us. On behalf of the assessee reliance is placed on the decision of the Hon'ble Supreme Court in the case of Khoday Eswarsa and Sons (1972) CTR (SC) 295 : (1972) 83 ITR 370) and also in the case of CIT vs. K.C. Behera and Others as decided by the Hon'ble Orissa High Court and reported in (1980) 124 ITR 514. Further reliance is also made on the decision of the Hon'ble Supreme Court in the case of Anantharam Veerasinghaiah Co. vs. CIT(1980) 16 CTR (SC) 189 : (1980) 123 ITR 457). It is submitted on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d entirely on the findings and on the materials collected in course of the assessment proceedings. Although materials, evidences etc. collected in course of the assessment proceedings are good evidence, but on that basis alone penalty imposed cannot be sustained. We have perused the decisions of Hon'ble Supreme Court relied on by the assessee in the instant appeal, Penalty matters are judicial in nature. It is for the Revenue to bring in on record material facts in course of penalty proceedings and not entirely depending on the materials and evidences as made out in the assessment order. In this connection, we may refer to the decisions as made by the Hon'ble Gauthati High Court in the case of CIT vs. Tezpur Roller and Flour Mills are repor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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