TMI Blog2015 (1) TMI 1149X X X X Extracts X X X X X X X X Extracts X X X X ..... ing revised return. The Tribunal, further, observed that the CIT(A) had found that the assessee was not able to prove the source of cash credit, and therefore, CIT(A) upheld the penalty levied by the AO, which is confirmed by the Tribunal. However, while doing so, here again, the Tribunal failed to appreciate the fact that the assessee had not furnished any details pertaining to advance tax which was untrue. On the contrary, the additions were of such nature that the assessee could not have foreseen. We are, therefore, of the opinion that the order of the Tribunal cannot be sustained and deserves to be quashed and set aside. - Decided in favour of the appellant-assessee - TAX APPEAL NO. 128 of 2001 With TAX APPEAL NO. 129 of 2001 - - - Dated:- 11-11-2014 - MR. KS JHAVERI AND MR. K.J.THAKER, JJ. MR RK PATEL, ADVOCATE for the Appellant MR SUDHIR M MEHTA, ADVOCATE for the Respondent COMMON ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1. Since, the issue involved in both the appeals is similar, they are heard together and disposed of by this common judgment. 2. By way of these appeals, the appellantassessee seeks to challenge the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edits was not accepted and found to be false. The accountant was not produced and the explanation that relations with him are strained was also found to be an unjustifiable excuse. In the assessment, it was also taken into consideration that the assessee had tried to square up the credit entries to conceal the particulars of income. Only 2 credit entries were explained and regarding the remaining entries, there were no documents or evidence brought on record. The names of parties from whom the temporary loans were obtained were not furnished. 20. The question before us is whether the abovementioned facts which resulted in addition of the cash credits as income of the assessee in themselves, without any further evidence, are sufficient for imposition of penalty by recourse to Explanation 1 of section 271(1)(c) as it stood in the relevant assessment year or at the time when the penalty proceedings were initiated and concluded. We do not consider it necessary to go into the question as to whether the Explanation 1 below section 271(1)(c) is a provision of substantive law or procedural law and whether it is prospective or retrospective in operation. The Explanation is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... instance to show that the assessee had been earning income from business outside books in past or in the year under consideration. Under the circumstances, this Court, in that case, held that merely because addition was made by invoking provisions of Section 68 of the Act, the penalty under Section 271(1)(c)of the Act would not follow as a consequence, thereof. 8. Mr. Patel also placed reliance on a decision of this Court in COMMISSIONER OF INCOME-TAX II VS. DHIRAJ R. RUNGTA , [2013] 40 taxamann.com 284. In that case, the revenue rejected the books of accounts of the assessee, therein, on the ground that the same was defective, however, made certain addition to the income of the assessee relying on the same documents. This Court, therefore, held that once having rejected the books of accounts of the assessee as being defective, it was not open to the revenue to rely upon the same set of documents to make addition to taxable income of the assessee. 9. On the other hand, Mr. Sudhir Mehta, learned Advocate for the respondent-Revenue, strongly supported the orders by the CIT(A) as well as the ITAT and submitted that there being failure on the part of the assessee to disclose all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ground that the total amount of G.P. Addition sustained by it was more. Further, by the very same order, the Tribunal remanded the matter to the concerned authority, so far as the amount of ₹ 21,900/- relating to interest free loan is concerned. 14. Now, coming to the facts of the present case, from the record it appears that the AO imposed penalty of ₹ 1,51,800/- on the appellant-assessee under Section 271(1)(c) of the Act and for the said purpose, he took into account three amounts, i.e. (1) ₹ 1,35,327/- towards extra G.P., (2) ₹ 92,335/- towards cash credit and squared-up account and (3) ₹ 21,900/- interest relating to interest free loans. Here, as stated above, it is clear that in the case of very assessee, in proceedings for the very A.Y. 1986-87, the Tribunal vide its order dated 23.02.2001 had already deleted the entire addition of ₹ 92,335/- and remanded the matter to AO for verification, so far as the amount of ₹ 21,900/- towards interest relating to interest free loan, is concerned. We are, therefore, of the opinion that once having deleted certain amount and remanded the matter in respect of the other amount for verificat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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