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2016 (12) TMI 39 - ITAT PUNE

2016 (12) TMI 39 - ITAT PUNE - TMI - Levy of penalty u/s. 271(1)(c) - additions on unexplained cash credits - Held that:- In the instant case the assessee has not been able to establish the identity of the creditors itself. The confirmations furnished by the assessee in the form of so called affidavits are nothing but self created documents and thus cannot be relied upon. Penalty confirmed - Decided against assessee - ITA No. 219/PN/2014 - Dated:- 9-9-2016 - SHRI R.K. PANDA, AM AND SHRI VIKAS AW .....

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wal Brothers, Chalisgaon, G.M. Oil Mill, Chalisgaon and Agrawal Industrial Complex, Chalisgaon. A search and seizure action u/s. 132 (1) of the Act was carried out in the case of Agrawal Group on 03-11-2004. In response to notice issued u/s. 153A of the Act, the assessee declared income of ₹ 3,07,896/- and agricultural income of ₹ 32,618/-. During the course of assessment proceedings the Assessing Officer made addition on account of low house hold expenses ₹ 1,31,071/-, unexpla .....

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r in respect of unexplained cash credits ₹ 2,12,000/-. The Assessing Officer, thereafter, initiated penalty proceedings u/s. 271(1)(c) of the Act for furnishing inaccurate particulars of income and levied penalty of ₹ 69,960/- on ₹ 2,12,000/- vide order dated 30-03-2012. The assessee carried the matter in appeal before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) upheld the levy of penalty on the ground that the assessee could not prove gen .....

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from whom the assessee had taken the loan. The Commissioner of Income Tax (Appeals) had recorded this fact in his order. The ld. AR of the assessee referred to affidavits of various persons from whom the assessee had allegedly taken loan at pages 22 to 32 of the paper book. The authorities below have erred in disbelieving the affidavits as the assessee could not produce the persons before the Assessing Officer. The assessee had furnished ledger extracts of the creditors and affidavits of all the .....

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ans to the tune of ₹ 2.54 lakhs. However, during assessment proceedings the assessee could not obtain confirmations from the small creditors aggregating to ₹ 2.12 lakhs. The Assessing Officer made addition u/s. 68 of the Act in respect of unconfirmed creditors. The Assessing Officer has accepted the confirmations in respect of ₹ 2.54 lakhs, on same analogy the affidavits from the creditors furnished by the assessee should have also been accepted by the Commissioner of Income Ta .....

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supported the findings of Commissioner of Income Tax (Appeals) in confirming the addition. The ld. DR contended that the affidavits filed by the assessee from the alleged creditors are nothing but self serving documents. The affidavits are defective. Neither they are notarized nor they are sworn before the Magistrate. The ld. DR pointed that in the affidavits complete address of the creditors is not given. The ld. DR further pointed that all the affidavits were executed on the same date and all .....

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erused the orders of the authorities below. The assessee is in appeal against the confirmation of penalty levied u/s. 271(1)(c) of the Act in respect of additions of ₹ 2,12,000/- made u/s. 68 of the Act. The penalty of ₹ 69,960/- has been levied on account of unexplained cash credits of ₹ 2,12,000/-. The assessee has filed affidavits at pages 22 to 32 of the paper book as confirmation from creditors for advancing of cash loans and also admitting repayment of same. A perusal of .....

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either they are executed in the manner in which they should have been nor the identity of the persons is established. Apart from the affidavits no other document has been placed on record to show the receipt of cash loans from the alleged creditors. As has been pointed out by the ld. DR the assessee has not produced a single creditor before the authorities below in support of his contentions. The documents placed on record cannot be considered as confirmations for the reasons mentioned above. Th .....

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ch were not backed by any other documentary evidences. The appellant has failed to discharge his onus in regard to genuineness of the above cash creditors. Moreover, all these facts came to notice of the department during search/post search enquiries. The appellant has introduced bogus cash credits in his books of account. The very fact that the appellant could' not produce any cash creditor also establishes that the cash credits amounting to ₹ 2,12,000/- were not genuine. The appellan .....

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