9911796707
TMI Blog2010 (4) TMI 1233X X X X Extracts X X X X X X X X Extracts X X X X ..... short] noticed that the assessee received following amounts towards share capital and unsecured loans from various persons detailed as under:- Sr. No. Particulars Share capital Unsecured loan Total 1 NRIs. 45,50,000 9,80,000 55,30,000 2 Assessees 20,84,500 17,36,700 38,21,200 3 Agriculturists 1,00,000 6,17,000 7,17,000 4 Non-assessees 17,17,500 24,97,100 42,14,600 ------------- ------------- ------------ 84,52,000 58,30,800 1,42,82,800 ------------- ------------- ------------ To a query by the AO, seeking list of share-holders and share- application forms, the assessee submitted vide letter dated 11-1- 1996 as under:- "Ours is a private limited company and most of our shareholders are relatives and friends of the promoters. They have accordingly not made any applications for shares and therefore the company does not possess any applications on record." 2.1 The AO further pointed out that the details of loans given by the persons, who are assessees, revealed that the following persons stated to have invested the amount mentioned against their names out of their own resources:- Sr. No. Name of the persons Amount invested out of own resource ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edits or the creditworthiness of these persons. Accordingly, the investment in share capital and loans from these persons were not accepted as genuine and added u/s 68 of the Act. 2.3 Regarding investment by non-assessees, the AO asked the assessee to produce the following persons for cross verification:- 1) Shri Amin Yasin Saiyed 2) Shri Khalik A Saiyed 3) Shri Ayub A Saiyed 4) Shri Salim Yasin Saiyed 5) Shri Yasin H Saiyed 6) Shri Hanif Saiyed 7) Shri V Prabhakaran 8) P A holder of Shri Abdul Tanver 9) Shri Mohmed Safi Belhasa 10) Shri Solanki Ishaque Yasin 11) Shri Jahid Salim Saiyed 12) Smt. Rukaiya Ayub Saiyed 13) Shri Yunus Sarif 14) Shri Liyakat Amin Saiyed 15) Shri Khaliq Rafiq Saiyed 16) Smt. Hamida Salim Saiyed 2.31 However, the assessee produced only the following three persons:- 1) Shri Manif Yasin Saiyed. 2) Shri Liyakat Amin Saiyed. 3) Shri Ayub Yasin Saiyed. Even these three persons did not produce any evidence in support of the investment made by them either in the form of share capital or loans to the assessee company nor they were aware of the terms and conditions of the loan given to the assessea-company. In view of these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee-company for purchase of shares. Accordingly,addition was reduced to Rs. 6,73,000, the assessee having failed to establish the genuineness of the transactions and the creditworthiness of the remaining creditors. 5.1 As regards addition of Rs.42,14,600/-, as mentioned in para V of the assessment order, the assessee produced the following persons out of 57 for examination u/s 131 of the Act:- 01. Liyakat Ali Amin Saiyed 225000 10. Khalil Rafiq Saiyed 300000 16. Ahid Hanif Saiyed 115000 17. Jahid Hanif Saiyed 115000 27. Saif Ali Khan 19000 34. Vinod Kumar 19000 36. N S Rani 19000 42. Hasmukhbhai B Patel 19000 45. Amir Khaya 19000 46. Jayantibhai M Patel 25000 53. Abdul R Shaikh 19000 54. Dineshbhai K Ahair 19000 56. Yusuf Saiyed 19000 57. Vasimbhai Shaikh 19550 836550 After verification, the AO concluded that the assessee proved the genuineness of some of the aforesaid share applicants assessed to tax while the others, who were not assessed to tax ,the assessee established their credit worthiness and mode of transactions. Accordingly, the AO reduced the addition to Rs.33,78,138/- [42,14,600 - 8,36,550],the assessee having failed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of Rs.7,95,000/- attributed to the minors as mentioned in para 4.1 of the appellate order dated 8.12.2004. After considering the submissions of the assessee, the ld. CIT(A) upheld the findings of the AO in the following terms:- "3 The appellant company was set up to manufacture craft paper. Sources of investment include cash credits and share deposits from persons of insubstantial means. The assessing officer made an addition of Rs.55,83,868/- in respect of unproved cash credits and share deposits. In reassessment this addition has been brought down to Rs.40,51,138/-. 4.1 The case in appeal is represented by Shri V.V.Bhagal, Advocate. Shri Bhagat has filed a letter before me conceding an addition of Rs.7,95,000/- representing the following: Sajid Salim Saiyed Rs. 3,00,000/- Vahid Hanif Saiyed Rs. 1,15,000/- Mehmoob AminSaiycd Rs. 2,10,000/- Rajman Ayub Saiyed Rs. 17,000/- ----------------- Rs. 7,95,000/- These share applicants were minor at the lime the shares were shown Io have been purchased. No evidence at all was filed in support of their genuineness. After considering these additions which are now admitted as non-genuine, the disputed additi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the additions have bee made for sufficient cause. The additions are upheld." 7 On further appeal by the assessee, the ITAT Ahmedabad Bench-C vide their order dated 03-03-2006 in ITA No.3933/Ahd/2004, restored the matter back to the file of the ld. CIT(A) with the following observations:- "6. The ld. AR submitted that the CIT(A) has not considered all facts. The CIT(A) did not provide sufficient opportunity of hearing. The AR drew our attention on assessee's letter dated 7-12-2004 which has been reproduced by the CIT(A) in his order as under:- "Shri Bhagat further submits as follows vide his letter dated 7-122004: The details regarding the present position of share holders creditors are yet to be worked out. This could not be worked out as there was a occasion of marriage in family of directors." 7. The ld. AR further submitted that a discretion has been conferred on the A.O. under Section 69 of the Act to treat the source of investment as the income of the assessee if the explanation offered by the assessee is not found satisfactory and the said discretion has to be exercised keeping in view the facts and circumstances of the particular case. The ld. AR in support ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ight of above discussion and keeping in view the above finding of jurisdictional High Court, we find it appropriate to send back this matter to the file of CIT(A) to decide the matter a fresh in accordance with law after providing reasonable opportunity of hearing to both sides." 8 In pursuance to the aforesaid directions of the ITAT, the CIT(A) in the impugned order concluded in the following terms: 2. In response to the notice of hearing, Shri V. V. Bhagat, Advocate attended and filed written submission which is placed on record. The case is discussed with him. 3. The only issue raised before the Hon'ble ITAT and the contention raised by the appellant are such that the share deposits and loans taken by the appellant company are genuine and CIT(A) ought to have accepted the same. The essence of the contention is narrated below: "Out of total addition of shares deposits and loans of Rs.6,73,000/-- + Rs.33,78,138/- = 40,51,138/-, Rs.7,95,000/- has been conceded by your appellant at C1T(A) stage and hence the addition of Rs.6,75,000/- + Rs.25,83,138/- = Rs.32,56,138/- is in dispute. For various reasons and based on evidences produced before the ACIT and CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is quite clear that the onus to prove its case is upon the appellant as the appellant is in appeal and not the department. Therefore, in the instant case the appellant has failed to discharge his onus. In that case it would not be unfair to conclude that the appellant has failed to prove that the unexplained loans/share deposits are genuine. There is no merit in the appellant's argument that the depositors now refused to give details as they think it is a private matter. Looking to the totality of facts the AO has rightly recommended in the remand report to uphold the addition after placing her reliance on the decision of Hon'ble Courts where in a ratio has been laid down that, it is for the assessee to establish the genuineness of all the depots in his books. Hon'ble Gujarat High Court in the case of Bomin P. Ltd. V/S. OIT 160 ITR 477 has ruled out that that section 68 enjoins the assessee to offer an explanation about nature and source of any sum found credited in the books of accounts for any previous year. And if there is no explanation or if the explanation is unsatisfactory in the opinion of assessing officer, the sum so credited is to be treated as income an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R 512 (Guj), the addition u/s 68 of the Act was not justified. On the other hand, the learned DR while referring to page 2 of the impugned order of the ld. CIT(A) contended that the ITAT had restored the issue to the file of the CIT(A) on the plea of the assessee that details regarding the present position of the shareholders and creditors could not be submitted due to the marriage in the family of the directors. Since the assessee did not furnish any further details, there was no ground for interference with the findings of the CIT(A). While referring to the decision of the Hon'ble Gujarat High Court in the case of Bomin P. Ltd. vs. CIT (1986) 160 ITR 477 (Guj), C. Kant & Co. vs. CIT (1980) 126 ITR 63 (Cal) and Addl. CIT vs. Hanuman Agarwal (1985) 151 ITR 150 (Pat), the learned DR contended that the assessee having failed to establish the creditworthiness of any of the depositors, the addition upheld by the CIT(A) should be sustained, especially when no new facts have been brought to the notice of the CIT(A).In his rejoinder, the learned AR contended that this being the first year of the operations of the company, no addition could have been made u/s 68 of the Act since all the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sum found credited in its books of account. If the explanation offered by the assessee is found not to be satisfactory, further enquiries can be made by the AO himself, both in regard to the nature and the source of the sum credited by the assessee in its books of account, since the wording of s. 68 is very wide. The Full Bench opined that- "If the shareholders exist then, possibly, no further enquiry need be made. But if the ITO finds that the alleged shareholders do not exist then, in effect, it would mean that there is no valid issuance of share capital. Shares cannot be issued in the name of non-existing persons........ If the shareholders are identified and it is established that they have invested money in the purchase of shares then the amount received by the company would be regarded as a capital receipt but if the assessee offers no explanation at all or the explanation offered is not satisfactory then, the provisions of s. 68 may be invoked". It is apparent that the Court had not reflected upon the question as to whether the burden of proof rested entirely on the assessee, and at which point, if any, this burden could justifiably be shifted to the AO. The Full ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 500/- and Rs. 17,27,500/- and record their findings, accordingly. In these circumstances, the matter is being decided in accordance with facts brought to our notice by the respective parties and as we understood on perusal of the relevant documents in the paper book submitted before us. As is apparent from the confirmations of the respective parties, only an amount of Rs. 3 lacs out of Rs. 8,55,500 & Rs. 7.12 lacs out of Rs. 17,27,500 is towards share capital. In these facts and circumstances, in the light of view taken in the aforesaid decisions by the Hon'ble Apex Court, ,especially when the existence of aforesaid shareholders has not been doubted, we have no alternative but to vacate the findings of learned CIT(A) and delete the aforesaid additions on account of share capital . 10.2 As regards the aforesaid remaining addition of Rs.5,73,000/-, we find that the this amount comprises loan amounts in the names of following persons: 1. Yasin Hussain Saiyed Rs.1,25,000 2. Sharif Jamal Rs.2,00,000 3. Yunus Sharif Rs.1,39,000 4. Ayub Mohid Husain Rs. 69,000 5. Amin Sadiq Qureshi Rs. 40,000 The aforesaid amounts were stated to be brought in by Yasin Husain Saiyed, S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itesh Rolling Mills P. Ltd.(supra). We find that despite directions of the ITAT in their order dated 3.3.2006, the ld. CIT(A) without adverting to the aforesaid decision of the Hon'ble jurisdictional High Court, upheld the addition of Rs. 32,56,138/- besides the amount Rs. 7,95,000/ surrendered by the assessee before the ld. CIT(A) as mentioned in the appellate order dated 8.12.2004. As already pointed out , in the case CIT vs. Sophia Finance Ltd. (1993) 113 CTR (Del)(FB) 472 :(1994) 205 ITR 98 (Del)(FB), the Full Bench of the Hon'ble High Court did not lay down any norms for deciding the extent of onus of proof of the amounts credited, when they observed : 'We make it clear that we are not deciding, nor it is our intention to decide as to on whom and to what extent is the onus to whom that an amount credited in the books of account is share capital and when does that onus stand discharged. This will depend upon on the facts of each case.' This significant observation of the Court clearly points out a subtle distinction between an ordinary cash credit and a credit by way of share capital. Apparently, the Court had in its mind the comprehensive law contained in the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... explain such credit entries. The explanation of the assessee did not find favour with the AO, the CIT(A) nor the Tribunal. However, the Tribunal deleted the addition by taking the plea that such cash credit entries could not represent the income or profit of the assessee as they were all made very soon after the company commenced its activities. In this manner, the Tribunal took the view that in the very nature of things the assessee could not have earned such huge amount of profit very soon after it commenced its activities. The Apex Court, in the above background inferred that it was reasonable to assume that such credit entries were capital receipts although for one reason or another, the assessee had not come out with the true story as regards the persons from whom such amounts were received. The Apex Court, thus, approved the findings of the Tribunal. 10.51 In CIT v. Smt. P. K. Noorjahan [1999] 237 ITR 570, Hon'ble Apex Court while construing section 69 of the Act observed that the intention of Parliament in enacting section 69 was to confer a discretion on the Income-tax Officer in the matter of treating the source of investment which has not been satisfactorily explained b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered depending on the facts and circumstances of each case in their entirety. Where source for the credit is identified by the assessee, however, the satisfaction is not proved by such persons, the attendant circumstances namely the absence of any commercial activity is a factor which cannot be said to be de hors while exercising the discretion of making an addition in terms of s. 68. In the instant case, we find that there is no denying the fact that certain amounts have been received by the assessee as share capital or as loan credits before the start of its commercial operations or even immediately thereafter and confirmations of such shareholders and creditors was placed before the AO and there being no material on record that such amounts were income of the company for the year under consideration, we are of the opinion that the ld. CIT(A) was not justified in upholding the addition made u/s 68 of the Act in respect of those creditors, whose confirmations were placed before the AO. 11. In view of the foregoing, out of impugned addition of Rs. 32,56,138/-, addition of Rs. 1,39,000/- in the name of Yunus Sharif & Rs. 69,000/- in the name of Ayub Mohid Husain, whose confirmation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4051138/- AO initiated penalty proceedings u/s 271(1)(c) of the Act on the ground that the assessee furnished inaccurate particulars of income in respect of the aforesaid two amounts. After dismissal of appeal of the assessee by the learned CIT(A)-I, Surat vide his order No. CIT(A)/VLS/339/03-04 dated 8-12-2004, in response to a showcause notice before levy of penalty ,the assessee vide their letter dated 18-2-2005 replied as under:- "As regards addition of Rs.673000/- we have to state that there are loans and share depositors from the confirmation and evidences produced, it is proved that the depositors are genuine, their identity is also proved. The disbelieving the explanation and taking the same u/s.68, would not amount to furnishing concealing the particulars of Income or filing inaccurate particulars of income. The onus is discharged by us. As regards addition of Rs.1727500/- the depositors were examined by the ACIT, on summons and they have categorically confirmed the share deposits. Thus the identity of the lender have been proved. They have purchased the shares of the company. They have accepted the position and acted as member. As regards addition of Rs.855550/-, the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to prove that the unexplained loans/share deposits are genuine. 5.4 One can clearly infer from the facts stated above that there is no merit in the appellant's argument that the depositors now refused to give details as they think it is a 'private matter'. It was held in the quantum appeal order that the AO has rightly made the addition after placing her reliance on the decision of Hon'ble Courts where in a ratio has been laid down that, it is for the assessee to establish the genuineness of all the deposits hi his books. Hon'ble Gujarat High Court in the case of Bomin P. Ltd. V/S. CIT 160 ITR 477 has ruled out that that section 68 enjoins the assessee to offer an explanation about nature and source of any sum found credited in the books of accounts for any previous year. And if there is no explanation or if the explanation is unsatisfactory hi the opinion of Assessing Officer, the sum so credited is to be treated as income and brought to tax accordingly. The assessee has to prove the identity of the creditor, credit worthiness of the creditor and genuineness of the transaction. It has been rightly held that any transaction even though bank is not conclusiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3,29,404/- as the appellant has grossly failed to defend the quantum addition by filing credible evidences. The appellant has failed to discharge the onus cast upon it in proving the genuineness of the transactions and in proving the worthiness of the depositors. It is definitely a case where in the conclusive analysis of facts do suggest that the appellant had introduced certain cash credits and share deposits and unsecured loans, which were later on not substantiated or explained-by it. It very well goes to lead an evidence to the effect that the what appellant did have as a cash credit of Rs.40,51,138/-, is nothing but income of the appellant, which has been credited in the guise of bogus cash credits without making payment of taxes thereon. After considering the totality of facts, I am satisfied that the AO has rightly imposed penalty u/s. 271(l)(c) of the Act, in case of the appellant. The appellant's Ground No-1 and 5 are Dismissed. 6. In Ground No.3 and 4, the appellant has raised such contention that the depositors have confirmed the deposit of Rs.6,73,000/- and share depositors have confirmed the share deposits of Rs.17,27,500/-. The appellant contented that these d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aside or cancelled by the Tribunal or otherwise, the penalty cannot stand by itself and the same is liable to be cancelled. Accordingly, penalty in relation to the aforesaid amount of Rs. 30,48,138/- is cancelled ,since the very basis upon which the penalty has been imposed does not exist in view of our aforesaid order in ITA no.1544/Ahd./2007 . 21. As regards penalty in relation to the amount of Rs. 7,95,000/- on account of investment in the name of four minors surrendered before the ld. CIT(A), as pointed out in his order dated 8.12.2004 and on the aforesaid amount of Rs. 2,08,000/- comprising Rs. 1,39,000/- in the name of Yunus Sharif & Rs. 69,000/- in the name of Ayub Mohid Husain, the assessee merely submitted a general reply that they have discharged the onus laid down upon them. As regards the amount of Rs. 2,08,000/- it has merely been submitted that it was on account of their agricultural income, neither the date nor any evidence in respect of source of amount is on records nor this has been placed either before the AO/CIT(A) in assessment and penalty proceedings nor even before us. Regarding amount of Rs. 7,95,000/- in the name of minors, it was pleaded that this was su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gricultural income of the creditors, has not been substantiated nor it was bonafide and there is no evidence on record in this behalf. There is nothing to suggest that the assessee discharged their onus even during penalty proceedings. In nutshell , except making general statements regarding discharging of onus without even submitting the basic details either during the assessment proceedings or even in penalty proceedings, no acceptable explanation has been furnished before the AO or before the learned CIT(A) during the course of appellate proceedings in respect of the aforesaid amount of Rs.10,03,000/-, while there is no material before us to take a contrary view in the matter. Thus, it cannot be said that in such a case, there could be no scope for saying that the assessee is guilty of furnishing of inaccurate particulars of income of Rs. 10,03,000/-., warranting penalty under section 271(1)(c) of the Act. 21.1 The expression 'has concealed the particulars of income' and 'has furnished inaccurate particulars of income' have not been defined either in section 271 or elsewhere in the Act. However, notwithstanding the difference in the two circumstances, it is now ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he view that it took and the Division Bench in the impugned judgment was right." 21.3 Moreover, it is a settled law that in economic offences, the statutory liability to pay either duty or tax is nothing but a strict liability where the question of proving beyond the shadow of doubt one's existence of bona fide belief that amount is not taxable does not arise. It goes without saying that any violation of the law or rules relating to economic offences, either relating to the payment of duty or tax as the case may be, the theory of mensrea is not attracted. In such matters, the rules of interpretation contemplate a strict interpretation rather than a liberal and wider interpretation. The breach of civil obligation which attracts a penalty under the provisions of an Act would immediately attract the levy of penalty irrespective of the fact whether the contravention was made by the defaulter with any guilty intention or not, vide Chairman, SEBI v. Shriram Mutual Fund [2006] 131 Comp Cases 591 (SC) ; [2006] 5 SCC 361. This view has been reiterated by the Hon'ble Supreme Court in their decision dated 29.9.2008 in the case of Union of India and others Vs. Dharmendra Textile Processo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xplanation of the assessee unsatisfactory. The Assessing Officer also imposed penalty under section 271(1)(c). The Orissa High Court held that there is no distinction between the income arising on account of section 68 and income earned otherwise. Section 68 dwells on deeming provision which applies when the assessee's explanation is rejected as unsatisfactory. The amount which is deemed to be income by operation of law is also income to which provisions of section 271(1)(c) will apply. 21.7 In the case of CIT v. Prathi Hardware Stores [1993] 203 ITR 641 (Ori.), the facts of the case were that the cash credits of Rs. 20,000 were found in the assessee's accounts in the name of Shri R.V.P. Ganapathi Rao ,who admitted to have advanced the loan and explained that this amount was saved out of commission which he had earned as commission agent. According to him, the said amount was not kept in the bank because of an apprehension that, if the facts of his having the amount was known to his brother, he would have been forced to use the same in his brother's business which he did not want to do. The AO did not accept the explanation and treated the amount as assessee's inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ute visualised the assessment proceedings and penalty proceedings to be whole distinct and independent of each other. In essence, the Explanation (both after 1964 and 1976) is a rule of evidence. Presumptions which are rebuttable in nature are available to be drawn. The initial burden of discharging the onus of rebuttal is on the assessee. The rationale behind this view is that the basic facts are within the special knowledge of the assessee. Section 106 of the Indian Evidence Act, 1872, gives statutory recognition to this universally accepted rule of evidence. There is no discretion conferred on the Assessing Officer as to whether he can invoke the Explanation or not. Explanation I which primarily concerns the case at hand, automatically comes into operation when, in respect of any facts material to the computation of total income of any person, there is failure to offer an explanation or an explanation is offered which is found to be false by the Assessing Officer or the first appellate authority, or an explanation is offered which is not substantiated. In such a case, the amount added or disallowed in computing the total income is deemed to represent the income in respect of whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve concealed such income within the meaning of section 271(1)(c). A further condition was imposed with effect from September 10, 1986, with which we are not concerned. In the case at hand, the explanation of the assessee so far as the genuineness of credit of the lender was concerned was not accepted. The assessee's appeal before the AAC failed. It was observed that the assessee offered an explanation but no material or evidence to substantiate the same. The Tribunal came to a presumptuous conclusion that the assessee may have succeeded in the appeal had it come before the Tribunal against the addition. No basis or reason has been indicated for such conclusion. A narration of facts would go to show that the AAC and the Tribunal did not consider the case of the assessee keeping in view the new Explanation 1 applicable on and after April 1, 1976. By operation of the Explanation, the onus lay on the assessee and findings given at the time of assessment are relevant and have probative value where the assessee offered nothing beyond the explanation offered at the assessment stage. In such cases, it cannot be said that the assessee had discharged the onus given by a preponderance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... National Textiles vs Commissioner Of Income-Tax, 249 ITR 125(Guj) on behalf of the assessee, the said decision related to AY 1974-75,before insertion of explanation 1 to sec 271(1)(c) of the Act relevant for the year under consideration. In the said case, Hon'ble Gujrat High Court deleted the penalty since that was a case where there was no circumstance to lead to a reasonable and positive inference that the assessee's case-that the cash credits were arranged as temporary loans, was false. But in the case under consideration, assessee failed to discharge initial onus of proving the genuineness of cash credits and instead, surrendered the amount of Rs. 7,95,000/- while in respect of an amount of Rs. 2,08,000 did not even furnish the date or confirmation nor any material/evidence of source of the amount either during the assessment/penalty proceedings and even before us. Moreover, Hon'ble Supreme Court in a later decision in the case of K.P.Madhusdanan,251 ITR 99 held that the explanation to section 271(1)(c) is a part of section 271. When the Income-tax Officer or the Appellate Assistant Commissioner issues to an assessee a notice under section 271, he makes the assessee aware ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any and every explanation by the assessee must be accepted. …………………." 21.13. In Commissioner Of Income-Tax. vs Vidyagauri Natwarlal And Others.,238 ITR 91(Guj),Hon'ble jurisdictional High Court held Coming to penalty proceedings, at the outset, we may say that it is not the case of even the assessee that in no case, where such disclosed cash credit amount is treated as income and assessed as income of that year, it cannot be subjected to penalty proceedings. Accepting the principle on which the Tribunal has acted would render the penalty proceedings for concealment in such case even if it is established from the evidence that entries made in the books of account were bogus to the knowledge of the assessee, no penalty proceedings under section 271(1)(c) can be sustainable because as soon as entries in the books of account have been disclosed to the Revenue showing the cash credit entered with particulars thereof, there cannot be any concealment of particulars of income or furnishing of inaccurate particulars thereof. The expression of the principle that mere rejection of the explanation is not sufficient to sustain penalty i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pted. We, therefore, confirm the order of the CIT (Appeals) insofar as concealment of income of Rs. 1,02,000." 21.14 In the instant case also the assessee having failed to discharge the onus, surrendered an amount of Rs. 7,95,000/- after ten years of filing of return while neither date nor even confirmation of the depositors for an amount of Rs. 2,08,000/- has been submitted . 21.15 As regards relienace on the decision in the case of Reliance Petroproducts(supra), the ld. AR did not demonstrate as to how this decision is of any help to the assessee. We are of the opinion that the said decision is not applicable to the facts of the case under consideration, since in the cited decision, the Hon'ble Apex Court found that there was no finding that any details supplied by the assessee in its Return were found to be incorrect or erroneous or false and as the assessee had furnished all the details of its expenditure as well as income in its Return, which details, in themselves, were not found to be inaccurate nor could be viewed as the concealment of income on its part. In such circumstances, Hon'ble Court held that merely because the assessee had claimed the expenditure, which claim w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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