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TMI Blog2015 (10) TMI 2750X X X X Extracts X X X X X X X X Extracts X X X X ..... any is engaged in the business of manufacture and sale of medicines. During the course of assessment proceedings, the AO made various additions which included an addition made under section 68 of the Act in respect of loan amount of Rs. 70.05 lakhs taken from Shri Jafir T Ibrahim. The AO asked the assessee to prove loan in terms of section 68 of the Act. The creditor was a NRI and the assessee furnished copies of bank statement and some other details. Since the assessee did not furnish any evidence to prove the credit worthiness of the creditor, the AO assessed the amount of Rs. 70.05 lakhs as unexplained cash credit under section 68 of the Act. The assessee could not succeed with regard to this addition both before the ld.CIT(A) as well as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Tribunal and hence, the ld.CIT(A) was justified in confirming the penalty levied on that addition. 5. We have heard the rival contentions and carefully perused the record. It is stated that Shri Jafir T Ibrahim is also a shareholder of the assessee company and he is residing in Hongkong. During the course of assessment proceedings, the assessee has furnished the copies of bank account and certain other details. We notice that the identity of the creditor and the genuineness of the transaction have been established by the assessee. However, the bank account copy was not found to be adequate to prove the credit worthiness of the creditor. Hence the assessee has filed a certificate obtained from the bank, wherein the bank has certifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the creditor and genuineness of the transaction have not been found fault with. We further notice that the Explanations and documents furnished by the assessee to prove the creditworthiness were only found to be inadequate and not found to be false. Under these set of facts, we are of the view that the Explanation 1 to section 271 (1)(c) of the Act would come to the help of the assessee. Hence, on conspectus of the matter, we are of the view that the addition of cash credits confirmed by the ITAT, in the facts and circumstances of the instant case, would not necessitate levy of penalty under section 271(1)(c) of the Act, as the same, in our view, cannot be considered to be concealment of particulars of income. Accordingly, we set aside ..... X X X X Extracts X X X X X X X X Extracts X X X X
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