TMI Blog1986 (9) TMI 100X X X X Extracts X X X X X X X X Extracts X X X X ..... ng a net taxable income at Rs. 11,086 which was not accepted by the ITO, as he made addition of Rs.24,000 for the cash credits in the name of Miss Gauri Tulsi on the ground that the assessee did not claim it as liability in the wealth-tax return, while other assets and liabilities were specifically mentioned in the statement of net wealth and this amount of Rs. 24,000 was conspicuous by its absence; that it established beyond any shadow of doubt that the above sum of Rs. 24,000 was not the borrowed from Miss Gauri Tulsi as claimed by the assessee; that in fact it was her concealed income not disclosed to the Department that the plea for it being a money borrowed from Miss Gauri Tulsi is only an after thought and it is amply clear from the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat moreover, the AAC also confirmed the addition vide his order dt. 19th July, 1982 and at the stage of penalty proceeding, the assessee had not given any explanation in response to the opportunities given to her, therefore, he viewed that it is a fit case for imposition of penalty under s. 271(1) (c) of the Act, as the assessee concealed her income/furnished inaccurate particulars of income. Thus, the ITO, in view of above reasons imposed penalty amounting to Rs. 6,400 under s. 271(1)(c) of the Act. 6. In appeal, the AAC deleted the penalty for the reasons mentioned in para Nos. 3 and 4 of his order on the grounds, inter alia that the penalty having been imposed mainly on the basis of non-acceptance of explanation is not sustainable an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1978-79, Expln. 1(A) and (B) to the s. 271(1)(c) is applicable as it was inserted w.e.f. 1st April, 1976. He further contends that the explanation offered by the assessee in the assessment proceedings was not held as false; rather addition was made in the quantum assessment for a sum of Rs. 24,000, for non-substantiating the explanation, therefore, s. 271(1)(c), Expln. 1(B) and not cl. (A) is applicable to the facts of the case. He further contends that penalty cannot be imposed on the assessee for an omission and the assessee has proved its bona fide on the ground that the amount in dispute is encashed by the depositor and it is there as cash credit in the books of the assessee in the name of the depositor. 9. In rebuttal, the ld. DR c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the asst. yr. 1978-79 and this Expln. to s. 271(1)(c) is inserted w.e.f. 1st April, 1976. The s. 271(1)(c), with Expln. 1(A) (B) and its proviso is as under: "271(1) : If the ITO or the AAC or the CIT(A) in the course of any proceedings under this Act is satisfied that any person— (c) has concealed the particulars of his income or furnished inaccurate particulars of such income, Expln. 1 : he may direct that such person shall pay by way of penalty, Expln. 1: Where in respect of any facts material to the computation of total income of any person under this Act, (A) such person fails to offer an explanation or offers an explanation which is found by the ITO or the AAC or the CIT(A) to be false, or (B) such person offers an expl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Gauri Tulsi and it is she who had it on the encashment of CTD. The only plea of Department is that the amount was kept by Miss Gauri Tulsi for 21 months in the house, which is impossible. It is merely suspicion and possibility of keeping it in the house cannot be ousted, particularly when Miss Gauri Tulsi had encashment of the CTD on attaining the age of majority and assessee's mother was thinking to marry her and as such it was natural to keep the amount in the house for the arrangement of the marriage and purchasing jewellery, cloth, etc. for it. Certainly, on account of it, it cannot be held that in the case of the assessee, cl. (B) to Expln. 1 of s. 271(1)(c) is applicable. 13. Assuming otherwise, then we have to see the proviso to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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