TMI Blog1992 (2) TMI 129X X X X Extracts X X X X X X X X Extracts X X X X ..... 000 in the assessment year 1977-78 and a sum of Rs. 20,000 in the assessment year 1979-80 as unproved cash credits under section 68 of the Act. He further disallowed the interest relating to these cash credits. In the first year, the cash credit appeared in the account of one Naresh Umesh Dalmia on 1-4-1976, while, in the second year, the cash credit was in the account of M/s. Sulochana Enterprise on 1-4-1978. These additions were sustained by the Appellate Tribunal and there is no dispute now that the orders of the Tribunal have become final. The ITO levied the penalties under section 271(1)(c) of the Act for alleged concealment of income with reference to these cash credits in both the years. He invoked the provision of Explanation 1 to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mental handicaps the assessee had signed the memoranda of appeal which showed that she was capable of understanding the relevant facts and that in spite of opportunity given by the ITO the assessee was unable to prove her claim that these were genuine loans from the parties and that, therefore, the levy of penalties was justified. 5. I have carefully considered the submissions urged on both sides in the light of the materials placed before me. 6. The additions of cash credits of Rs. 17,000 and Rs. 20,000 were the subject matter of appeal to the Tribunal in ITA Nos. 687-689 (Cal.)/88 and these additions were sustained by the order of the Appellate Tribunal dated 8-12-1989 a copy of which appears at pages 18 to 23 of the assessee's pape ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s closure he was no longer in the service of the said company. To a specific question put by me it was stated by the assessee's learned Chartered Accountant that this gentleman is distantly related to the assessee but that the assessee could not contact him as he was no longer in the service of Panalur Paper Mills Ltd., of which the assessee's father is the Managing Director. A perusal of the confirmatory letter on record shows that the loan amount of Rs. 17,000 was returned to the creditor sometime in October 1976. The order of the Tribunal further shows that the said creditor was assessed in B-Ward, Quilon. There is no dispute that the assessee is a dumb person and that she is also mentally retarded. A perusal of the assessment orders for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds of the present assessee is because the creditor had not shown this loan amount and the interest thereon in its books of account or assessment. This would, however, show that the assessee has been able to prove the identity of the party which is a firm assessed in Calcutta and that the assessee had also placed all the relevant facts relating to this loan taken from this firm and had not kept back any facts relating to the same. I find myself unable to appreciate how the departmental authorities came to the conclusion that these two cash credits represented the concealed income of the assessee. 9. In the light of the above facts I am of the considered view that the assessee could not be held to have had any mens rea to hold that there w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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