TMI Blog2015 (9) TMI 1469X X X X Extracts X X X X X X X X Extracts X X X X ..... fact, receivable from these trade debtors. The above discussion divulges that the explanation given by the assessee for receipt of the amount from its old debtors has not been disproved by the AO. Though the assessee could not satisfactorily explain the receipt of cash from these three parties, the fact that this amount was actually receivable, which was claimed to have been received during the year, goes to show that the explanation of the assessee about the receipt of such amount was a possible one albeit not satisfactory. The Tribunal has also noticed in the quantum order that: ‘it was obligatory on its part to produce the parties or give their proper addresses to the Department.’ It further observed that: ‘it failed to discharge its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subsequently deposited in its bank account. These cash receipts were mainly from two parties, namely, M/s GR Overseas P. Ltd. ₹ 7,25,000/- and M/s GR Mechanical Works Ltd. ₹ 8,00,000/-. The AO observed that the assessee was not having any fresh business dealings with these two parties and the payments were shown to have been received in cash against the old outstanding balances. The assessee was called upon to furnish complete address of these parties. From the details provided by the assessee, information u/s 133(6) was called for from these parties. The letters sent to these parties were not received back unserved. On 19.12.2009, the AO received a reply from one of the parties, namely, M/s GR Overseas P. Ltd. stating that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te that there is no cogent material evidencing the receipt of a sum of ₹ 15.25 lac from these two parties. It is further observed that similar position prevailed in the immediately preceding assessment year, that is, 2006-07. In such earlier year also, the assessee received cash sums in similar circumstances from three parties, one of which is, M/s G.R. Overseas Pvt. Ltd. The AO made the addition and the Tribunal has finally upheld the addition by observing that the denial by GR Overseas P. Ltd. of making any cash payment to the assessee, clinched the issue. Since the facts and circumstances of the instant year are, mutatis mutandis, similar to those of the preceding year, respectfully following the precedent, we uphold the impugned o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of income or furnishing of inaccurate particulars of income by the assessee. Where an assessee tenders an explanation which remains unproved, it cannot be considered as a case of concealment. If, however, the explanation given by the assessee is specifically disproved by the AO, then, it leads to the imposition of penalty. The Hon ble Gujarat High Court in National Textiles vs. CIT (2001) 249 ITR 125 (Guj.), has held that in order to justify levy of penalty for addition of cash credits, the explanation tendered by the assessee must be disproved. Deleting the penalty so imposed, the Hon ble High court held that it was not a case of imposition of penalty. The Hon ble Calcutta High Court in Durga Kamal Rice Mills vs. CIT (2004) 265 ITR 25 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a most crucial angle which the Assessing Officer simplistically ignored . The above recording amply proves that the assessee did require the cross examination of M/s G.R. Overseas, which has eventually not taken place. As regards the other two parties, the assessee contended that they were small parties, whose whereabouts were not ascertainable. This has again not been demolished by the AO. These circumstances need to be seen in the backdrop of the fact that the amounts were in fact, receivable from these trade debtors. The above discussion divulges that the explanation given by the assessee for receipt of the amount from its old debtors has not been disproved by the AO. Though the assessee could not satisfactorily explain the receipt of c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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