TMI Blog1978 (9) TMI 120X X X X Extracts X X X X X X X X Extracts X X X X ..... d as M/s. Sundaram Badrinarayan on 4th April, 1963. Sri Sundaram Narnoli was a partner along with the assessee and others in the above firm. Sri Sundaram Naronli got stock of the cloth worth Rs. 47,378.39 and cash of Rs. 32,299.43 on the dissolution. It was claimed that Sri Narnoli deposited Rs. 77,479 and Rs. 8,800 out of the above amounts. Sri Sundaram Narnoli filed a confirmation letter before the ITO. Further he was examined by the ITO and the ITO was not satisfied with the explanation of Sri Narnoli. Consequently he added during the asst. yr. 1964-65 Rs. 77,479 and Rs. 8,800 as income from undisclosed sources and disallowed the payment of interest of Rs. 13,385 income the asst. yr. 1965-66. During the years under appeal, the assessee c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of interest to Sri Sundaram Narnoli was concerned, the assessee concealed his income. But the IAC agreed with the assessee that no penalty could be imposed for the extra addition in the trading account. Consequently, he sustained the penalty at Rs. 18,131, Rs. 25,888 and Rs. 30,549 for the assessment years 1970-71 to 1972-73. 3. Shri. P.K. Rajgarhia, counsel of the assessee, filed the order of the Tribunal income ITA No. 502 (Pat) of 1972-73 and stated the facts and urged that it is the admitted position that Shri Sundaram Narnoli got stock of cloth of Rs. 47,378 and cash of Rs. 32,929 on the dissolution of the firm on 4th April, 1963. Shri Narnoli deposited the amount immediately on the dissolution of the firm and he also filed a confi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Narnoli denied to have deposited the amount with the assessee. On the above facts, the penalty under s. 271(1) (c) could not be sustained. The assessee has brought ample material to prove that the deposit was made by Shri Narnoli. The assessee has also brought the material facts that Shri Narnoli before the deposit got stock of cloth as well as cash from the firm of M/s. Baxiram Laxminarayan and M/s. Sundaram Badrinarayan and, therefore, he was in a position to deposit the amount with the assessee. There may be several reasons due to which Shri Narnoli subsequently denied the deposit with the assessee, but prima facie it could not be said that the material produced by the assessee is not enough top justify the genuineness of the transacti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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