TMI Blog2017 (1) TMI 890X X X X Extracts X X X X X X X X Extracts X X X X ..... nfirmed and the appeal of the assessee is dismissed. - Decided in favour of revenue - ITA.No.2586/Ahd/2013 - - - Dated:- 12-1-2017 - SHRI RAJPAL YADAV, JUDICIAL MEMBER For The Assessee : Shri Rushi J. Parikh with Shri Jayraj Dhakan, AR For The Revenue : Shri Mudit Nagpal, Sr.DR ORDER Assessee is in appeal before the Tribunal against order of ld.CIT(A)- IV, Ahmedabad dated 26.8.2013 passed for the Asstt.Year 2004-05. 2. Solitary grievance of the assessee is that the ld.CIT(A) has erred in confirming penalty of ₹ 3,41,232/- which was imposed by the AO under section 271(1)(c) of the Income Tax Act, 1961. 3. Brief fact of the case are that the assessee has filed his return of income on 1.11.2004 declaring tota ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. Before me, ld. counsel for the assessee contended that the assessee has filed confirmation. He has filed their PANs, copy of balance sheet, capital account and copy of return. In the penalty proceedings, the ld.AO did not grant adequate opportunity to produce all these creditors before him. It was also pleaded that the assessee is trading in scrap. These are small vendors, who supplied him scrap and also purchased scrap from him. They belonged to disorgnised sector of business community. All the representative of five concerns came to the Aaykar Bhavan during the assessment proceedings, and after knowing the questioning and threat given to the first person, all of them fled away . Therefore, it was contended that no penalty be impose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion which he is not able to substantiate and fails to prove that such explanation is bona fide and that all the facts relating to the same and material to the computation of his total income have been disclosed by him, then, the amount added or disallowed in computing the total income or such person as a result thereof shall, for the purposes of Clause (c) of this sub-section, be deemed to represent the income in respect of which particulars have been concealed. 6. A bare perusal of this section would reveal that for visiting any assessee with the penalty, the Assessing Officer or the Learned CIT(Appeals) during the course of any proceedings before them should be satisfied, that the assessee has; (i) concealed his income or furnished in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xplanation 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 would come to play by the failure of the assessee to substantiate his explanation in respect of any fact material to the computation of total income and in addition to this the assessee is not able to prove that such explanation was given bona fide and all the facts relating to the same and material to the computation of the total income have been disclosed by the assessee. These two situations provided in Explanation 1 appended to section 271(1)(c) makes it c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ersons. Though it is claimed that the appellant wished to produce the creditors in penalty proceedings but was not allowed by the A.O. is not borne out by records and the assessee has failed to show that such a claim had actually been made and refused by the A.O. The correctness of such a claim is laid bare by the fact that the appellant himself states that if it could not produce the creditors the A.O. should have summoned them. The appellant's reliance on the fact that Mr. Mayur Rana presented himself and accepted giving advance to the appellant has been rejected as not of any help to the appellant by the Hon'ble Tribunal. The plea of the appellant that it had filed confirmations before the A.O. is also of no avail as these confir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant are rejected. Penalty of ₹ 3,41,232/- levied u/s. 271(l)(c ) at minimum rate of 100% of tax sought to be evaded is confirmed. 8. The ld.counsel for the assessee has relied upon the judgment of the Hon ble Gujarat High Court in the case of National Textiles Vs. CIT, 114 TAXMAN 203 (Guj). On the strength of these decisions, it was contended by the ld.counsel for the assessee that mere confirmation of addition under section 68 would not authorize AO to visit the assessee with penalty. He also contended that AO inquired source of source for making addition. 9. I have duly considered this decision. But I find that the assessee failed to substantiate the alleged loans given by five entities. According to the assessee, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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