TMI Blog2016 (9) TMI 804X X X X Extracts X X X X X X X X Extracts X X X X ..... it was not going to affect materially to the Revenue. This explanation was rejected by the Revenue authorities on the ground that it is difficult to accept as to how the accountant has committed the mistake. To my mind, this will always be a difficult question, because, there is no scientific instrument which can tests the mind of an individual as to how he has committed a particular negligence at a particular time. It is very subjective aspect, and it will always be difficult to bring demonstrative evidence of a particular state of mind while committing such mistake. But from circumstantial evidence, it can always be concluded that whether there was a mala fide intention for not including the value of particular shares in the closing tock. No such circumstance have been brought on record for falsifying the explanation of the assessee. Therefore, in view of the above discussion, it is of the view that the assessee does not deserves to be visited with penalty.- Decided in favour of assessee. - ITA.No.2456 and 2457/Ahd/2012 - - - Dated:- 1-8-2016 - SHRI RAJPAL YADAV, JUDICIAL MEMBER For The Assessee : Shri Tushar Hemani For The Revenue : Shri Dinesh Singh, Sr.DR ORD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee contended that he is a partner in the firm, M/s.Manishkumar Co. and money was withdrawn from M/s.Manishkumar Company which was deposited in the bank account. This explanation of the assessee was rejected in the light of the statement given during the course of survey and addition of ₹ 25 lakhs was made. 7. I find that similar addition was made in the Asstt.Year 2005-06, which is being deleted by the ld.CIT(A). The finding of the ld.CIT(A) in the Asstt.year 2005-06 on this issue reads as under: 2. First ground of appeal is regarding addition of ₹ 3,20,000/- u/s.68. The Assessing Officer found that appellant had credited ₹ 6,70,000/-, out of which ₹ 2,85,000/- was offered as income, being unexplained cash credit, for taxation. Since the appellant could not explain satisfactorily source of the balance amount, addition of ₹ 3,20,000/- u/s.68 was made. 2.1. Before me, appellant submitted that he was a partner in M/s. Manishkumar Co. and had introduced the cash in his capital account for business by withdrawing from the firm. Appellant filed the relevant pages of cash book of M/s. Manishkumar Co. Appellant also filed copy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s second fold submissions, he contended that though the addition of ₹ 25 lakhs was made by the AO on the basis of the statement given by the assessee during the course of survey, but the stand of the assessee taken during the course of assessment proceedings was not considered. The ld.AO did not verify the facts whether sufficient cash balance was available with the firm, M/s.Manishkumar Co. where the assessee is partner and the amount had travelled to Vijay Bank account from this firm. The explanation of the assessee was not found to be false. 11. The ld.DR, on the other hand, contended that as far as first fold of submission is concerned, the ld.AO has initiated the proceedings for furnishing inaccurate particulars and concealment of income. But while impugning penalty, the ld.AO has recorded a specific finding that the assessee has concealed the income, and therefore, penalty has been imposed for concealing the income. There is no ambiguity in the finding of the AO. 12. Section 271(1)(c) of the Act has a direct bearing on the controversy which reads as under: 271. Failure to furnish returns, comply with notices, concealment of income, etc.- (1) The Assessing Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate so, statutory deeming fiction for concealment of income comes into play. This deeming fiction, by way of Explanation-1 to section 271(1)(c) postulates two situations; (a) first whether in respect of any facts material to the computation of the total income under the provisions of the Act, the assessee fails to offer an explanation or the explanation offered by the assessee is found to be false by the Assessing Officer or Learned CIT(Appeal); and, (b) where in respect of any fact, material to the computation of total income under the provisions of the Act, the assessee is not able to substantiate the explanation and the assessee fails, to prove that such explanation is bona fide and that the assessee had disclosed all the facts relating to the same and material to the computation of the total income. Under first situation, the deeming fiction would come to play if the assessee failed to give any explanation with respect to any fact material to the computation of total income or by action of the Assessing Officer or the Learned CIT(Appeals) by giving a categorical finding to the effect that explanation given by the assessee is false. In the second situation, the deeming fiction w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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