TMI Blog1992 (4) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... come of Rs. 9,010. The assessee firm comprised of 7 partners. All of them are brothers and Smt. B. Sitamahalaxmi is their mother. There was a search in the residential premises of the partners of the firm conducted under s. 132 of the IT Act on 12th Oct., 1984. During the course of which the account books were seized by the Department. A cash credit of Rs. 7,000 was found credited in the day book of the firm on 26th July, 1982. In the search proceedings both day book as well as ledger maintained by the assessee firm were seized. A perusal of the ledger disclosed that this cash credit dt. 26th July, 1982 was not ledgerised. Further, the cash credit entry dt. 26th July, 1982 was found made in the day book in pencil and it was not inked even o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , he held that in the quantum proceedings, no appeal was taken as against the assessed income of Rs. 18,469. The ITO, therefore, imposed penalty of Rs. 1,297 which is the minimum of the penalties imposable and passed his penalty order dt. 20th March, 1988. 3. Aggrieved against the penalty, the assessee went in appeal before Dy. Commissioner(A), Visakhapatnam, who dismissed the appeal by his impugned orders dt. 13th Sept., 1988. Hence the second appeal before this Tribunal. 4. We have heard Sri M.J. Swamy and Smt. Prabha Jain, learned advocates for the assessee, and Sri D.U.V.G.V. Raghava Rao, learned Departmental Representative. Having heard both sides, we are of the view that it is not a fit case where penalty under s. 271(1)(c) is imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... redients of the cash credit are established or not. They are the identity of the creditor, her credit worthiness of capacity to lend the amount and the truth of the transaction. In this case admittedly the address of the creditor is very well known and is identifiable. She is mother of the partners. In the impugned order, the Dy. CIT(A) states the following in third para of his order though numbers to the paras are not given: "In the course of examination, Smt. Sita Mahalakshmi explained the source of Rs. 7,000 to have flown from the sale of her agricultural lands." From the above it is very clear that Smt. B. Sita Mahalaxmi was also examined. According to the assessee, she was examined by the Dy. CIT(A) in the penalty proceedings when ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y filed cash flow statement. Is it the assessee or is it the cash creditor? The Departmental Representative did not produce a copy of the cash flow statement said to have been filed before CIT in s. 132(11) proceedings. What is the order passed under s. 132(5) and with reference to which property (money, bullion, jewellery or other valuable article or thing) the said order was passed and who had preferred the appeal under sub-s. (11) of s. 132 before the CIT and what is the order obtained thereon, were also not made known to me in this appeal. However, the explanation of the assessee remained that by mistake statement did not contain the amount borrowed from Smt. B. Sita Mahalaxmi on 26th July, 1982, if the debtor did not show it as a cash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that it was not entered in the day book, was not inked, that the entry was not ledgerised and the cash flow statement filed before CIT under s. 132(11) proceedings did not contain the omission of cash credit of sum of Rs. 7,000 though create some suspicion, does not make the cash credit unbelievable. Suspicion, however, strong cannot supplant proof. Assessment proceedings are different from penalty proceedings. The finding given in the assessment proceedings though relevant, is not conclusive in the penalty proceedings. The assessee is entitled to lead fresh evidence in support of cash credit in the penalty proceedings. Here in this case Smt. B. Sita Mahalaxmi was examined only in the penalty proceedings by the Dy. CIT(A). She was not cross ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GT vs. Executors and Trustees of the Estate of late Shri Ambalal Sarabhai (1988) 67 CTR (SC) 247 : (1988) 170 ITR 144 (SC) and (1991) 187 ITR 336 (sic). In the case of CIT vs. K.A. Patch taking into consideration that the tax involved is an extremely petty amount, the Hon'ble Supreme Court declined to interfere with the judgment of the High Court and the appeal was also dismissed. In the case of CIT vs. Eldee Wire Ropes Ltd. a reference to the High Court was not ordered on the ground that only very small amount is involved. In (1988) 170 ITR 144 (SC) their Lordships came to a conclusion that this is a fit matter where remand should be ordered to the GTO. However, having regard to the pecuniary involvement in the case which is small th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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