TMI Blog2015 (2) TMI 1105X X X X Extracts X X X X X X X X Extracts X X X X ..... as penalty proceedings are concerned. It is well settled that the parameters of judging the justification for addition made in the assessment proceedings is different from the penalty imposed on account of concealment of income or filing of inaccurate particulars of income and that certain disallowance/additions could legally be made in the assessment proceedings on the preponderance of probabilities but no penalty could be imposed u/s.271(1)(c) of the Act on preponderance of probability and the Revenue has to prove that the claim of the assessee was not genuine or was inflated its tax liability. Further merely because additions have confirmed in appeal or no appeal has been filed by assessee against additions made, it cannot be the sole gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 5,96,176/- u/s. 271(1)(c) of the Act. Aggrieved by the aforesaid order of A.O., assessee carried the matter before the CIT(A) who vide order dated 03.03.2011 confirmed the penalty only on addition of unexplained cash credit. Aggrieved by the aforesaid order of CIT(A), assessee is now in appeal before us and has raised following ground: 1. The Id. CIT(A) has erred in law and on the facts of the case in confirming the action of Id. AO in levying penalty u/s 271(1)(c) of the Act on disallowance of ₹ 15,00,000/- being unexplained cash credit under section 68 of the Income tax Act, 1961. 2. The penalty levied is wholly unsustainable in law and on facts and as such the appellant could not be charged with any guilt of furnishin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .5 lacs) and Piyush G. Shah HUF (Rs.2.5 lacs). He further submitted that aforesaid sum were not cash credits but were trade credits and they cannot be treated as cash credit for the purpose of making addition u/s. 68. He further submitted that A.O. never doubted the purchases made from the concerned persons to whom the aforesaid persons have made payments. He further submitted that once the figures of purchases and corresponding sales are not doubted, the balances of trade creditors who have made payments to the concerned persons on behalf of assessee cannot be treated as unexplained cash credits. He further submitted that assessee had furnished full details of the aforesaid persons and thus, had discharged initial burden cast on it. He fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d all the material facts before the A.O. and has also submitted the explanation which has not been found to be false. It is a well settled law that penalty proceedings are entirely distinct from assessment proceedings and however relevant and good, the findings in assessment proceedings may not be conclusive so far as penalty proceedings are concerned. It is well settled that the parameters of judging the justification for addition made in the assessment proceedings is different from the penalty imposed on account of concealment of income or filing of inaccurate particulars of income and that certain disallowance/additions could legally be made in the assessment proceedings on the preponderance of probabilities but no penalty could be impos ..... X X X X Extracts X X X X X X X X Extracts X X X X
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