TMI Blog1982 (6) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... d proceedings under s. 271(1)(c) and levied a penalty of Rs. 24,000. 3. When the assessee carried the issue pertaining to penalty before the AAC, he cancelled the same. 4. It is this action of the AAC cancelling the concealment penalty of Rs. 24,000 levied by the ITO under s. 271(1)(c) which is disputed before us. The ld. Deptl. Rep. Mr. M.P. Singh submitted that Mathra Dass whose explanation was rejected in respect of Rs. 10,000 credit, was not a man of means. His story was connected and patently false. He submitted that it is not merely rejection of his submission but the ITO has succeeded in bringing material to prove the falsity of the same. He relied on the case of Vishwakarma Industries vs. CIT (1982) 29 CTR (P H) 243: 1982 Tax LR 983 (P H). He also vehemently argued that in the instant case it was not the Department which was to prove that it is the concealed income of the assessee once the said amount was subjected to tax under s. 68. He drew our attention to the Commentary of Kanga and Palkhiwala and argued at length that no additional material is necessary for sustenance of penalty in addition to what has been considered for sustenance of addition. He said that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r is an obiter and there can not be any debate about it. He placed his reliance on the case of CIT vs. Hanumandas Maheshwari 1975 Tax LR 109 (Ori) and Hardwarmlal Onkarmal vs. CIT 1974 Tax LR 190 (Pat) besides the case of CIT vs. Ganpatrai Gajanand (1977)108 ITR 403 (Ori) and Shanker Industries vs. CIT (1978) 114 ITR 689 (Cal). 7. After taking into consideration the rival submissions and going carefully through the facts of the case, we are unable to interfere in the finding of the AAC cancelling the penalty. There is no dispute about the fact that Mathra Dass in whose account there was a credit of Rs. 10,000 was not only produced before the ITO but his statement was recorded and he admitted to have advanced the said amount of Rs. 10,000. Sukhminder Singh was also produced and he also admitted to have advanced the loan and he was supplied the cloth by the assessee in respect of which adjustment of Rs. 11,000 is verifiable. Regarding deposit of Rs. 2,000 in the case of M/s Pannalal Shiv Shankar, there was money in the cash book and the payments were made at Delhi and he made the entry after making the payment and it will not be out of place to mention that the addition of Rs. 2,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d sale of ball bearings, had originally filed its return for the asst. yr. 1969-70 declaring income of Rs. 99,095 on 5th Sept., 1969. During assessment proceedings, the ITO found out cash credits totalling Rs. 30,000 in the name of M/s Jagan Nath Sons. Since the assessee came forward with confirmatory letters in respect of the same, the said cash credit was considered as genuine. It was after completion of the above assessment that the Revenue came to know that the loans appearing in the name of M/s Jagan Nath Sons were not genuine and so much that even Jagan Nath of the said firm categorically stated that he was a name lender. In that case, in order to avoid controversy, the assessee came forward with a startling disclosure and filed revised returns for the asst. yrs. 1969-70, 1970-71 and 1971-72 and the fresh return were filed for different and higher figures that the original ones and the ITO initiated proceedings for concealment penalty and levied the same. In this case, their Lordships of the Punjab and Haryana High Court did observe that "ratio of Anwar Ali's case is no more applicable" and further held that Karnail Stngh's case decided by Division Bench of the Punjab Hig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een finalised. "However, as the point is not directly before us (and, therefore, has not at all been debated), we do not in any way wish to opine about the validity of a penalty notice issued prior to the determination of the assessed income." In support of the assessee's case, the ld. counsel drew our attention to the Tribunal's order dt. 26th Sept., 1981 in the case of Labchand Deokaran vs. ITO (ITA No. 45(Pn)/81) reported in (1982) 13 TTJ 90 in which the ld. Members after referring to catena of judgments made the following observation while cancelling the penalty regarding onus under Expln. to s. 271(1)(c): "7. We have carefully considered the submissions of both the parties. We are unable to uphold the penalty. The discrepancies in the statements of the depositor are not sufficient to bring home the charge of concealment on the part of the assessee, more so when the ITO did not cross-examine the depositor on his affidavit and did not bring any evidence on record in the penalty proceedings to prove the charge of concealment. The assessee had discharged his onus under Expln. to s. 271(1)(c) by producing the depositor. Under these circumstances we cancel penalty of Rs. 5, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der circumstances. Again reliance of the ld. Deptl. Rep. in the case of Shankar Industries is equally misplaced as on the earlier two cases, as the said case is also in respect of genuineness of cash credit. In the said case, head not read as under: "It is necessary for the assessee to prove prima facie the transaction which results in a cash credit in his books of account. Such proof includes proof of the identity of his creditor, the capacity of such creditor to advance the money and, lastly, the genuineness of the transaction. These things must be proved prima facie by the assessee and only after the assessee has adduced evidence to establish prima facie the aforesaid, the onus shifts to the Department. Where the assessee establishes only the identity of the creditor and nothing more, the cash credits can be treated as the income of the assessee from undisclosed sources." We are unable to understand as to how this case could assist the Revenue. Undoubtedly, the Orissa High Court decision in the case of Ganpatrai Gajanand is the only case relied upon by the ld. Deptl. Rep. which is in respect of penalty. But even in that case, the limited issue was whether the addition made ..... X X X X Extracts X X X X X X X X Extracts X X X X
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