Shri Santosh Walia, Kaithal V. ITO, Kaithal

ITA 1185/CHANDI/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9827 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-07-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 29-03-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 26-12-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: S K MUKHI
• Keywords: Unexplained cash credit; Salary income; Peak credit; Source of fund
• Section: 143(3); 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.1185/CHD/2013 ASSESSMENT YEAR:2005-06 SHRI SANTOSH WALIA VS. THE ITO S/O SH. YADHISTER WALIA WARD 3 CONSTRUCTION DIVISION NO. 9 KAITHAL CANAL COLONY, KAITHAL PAN NO. AATPW8230H (APPELLANT) (RESPONDENT) APPELLANT BY : SH. S.K. MUKHI RESPONDENT BY : SH. MANJIT SINGH DATE OF HEARING : 25/05/2016 DATE OF PRONOUNCEMENT : 01/07/2016 ORDER PER ANNAPURNA GUPTA A.M. THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A), KARNAL, DT. 08/08/2013, CONFIRMING THE LEVY OF PENA LTY UNDER SECTION 271(1)(C). THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APP EAL. I) THAT THE LD. CIT(A) IS NOT JUSTIFIED IN CONFIRM ING THE IMPOSITION OF PENALTY ON THE AMOUNT OF TOTAL ADDITION CONFIRMED TO THE EXTEN T OF RS. 3,71,153/- BY THE ASSESSING OFFICER WHICH IS ILLEGAL, WITHOUT JURISDI CTION, ARBITRARY AND HIGHLY EXCESSIVE THUS BAD IN LAW AND SO NEEDS TO BE QUASHED. II) THAT THE LD. CIT(A) IS NOT JUSTIFIED IN CONFIRM ING THE IMPOSITION OF PENALTY ON THE AMOUNT OF TOTAL ADDITION CONFIRMED TO THE EXTEN T OF RS. 3,71,153/- OF THE ASSESSING OFFICER WITHOUT APPRECIATING THE EXPLANAT ION AND EVIDENCES FILED BY THE APPELLANT WITHOUT APPRECIATING THE FACTS THAT P ENALTY PROCEEDINGS ARE INDEPENDENT PROCEEDINGS WHICH IS ILLEGAL, WITHOUT J URISDICTION, ARBITRARY THUS BAD IN LAW AND SO NEEDS TO BE QUASHED. III) THAT WITHOUT PREJUDICE TO ABOVE THE APPELLANT DISPUTES THE QUANTUM OF PENALTY AS HIGHLY EXCESSIVE AND UNCALLED FOR AND AL SO DISPUTES THE VERY IMPOSITION OF PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT, 196 1. IV) THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND A ND DELETE ANY OF THE GROUNDS OF APPEAL ON OR BEFORE THE DISPOSAL OF THE PRESENT APPEAL. 2 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEEE I S AN EMPLOYEE DERIVING INCOME FROM SALARY AND HAD FILED HIS RETURN OF INCO ME FOR THE IMPUGNED ASSESSMENT YEAR DECLARING INCOME OF RS. 44,680/- FR OM SALARY PLUS AGRICULTURAL INCOME OF RS. 60,000/- VIDE RETURN FILED ON 30/03/2 006. THEREAFTER NOTICE UNDER SECTION 148 WAS ISSUED TO THE ASSESSEE IN RESPONSE TO WHICH THE ASSESSEE FILED RETURN OF INCOME DECLARING INCOME FROM SALARY AT RS . 44,680/- INCOME FROM OTHER SOURCES AT RS. 5,723/- AND AGRICULTURAL INCOME AT R S. 1,60,000/-.DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF DEPOSIT OF RS. 18,77,500/- IN HIS BANK ACCOUNT, WHI CH THE ASSESSEE EXPLAINED BY STATING THAT THERE WERE REPEATED DEPOSITS AND WITHD RAWALS IN HIS BANK ACCOUNT AND THEREFORE ONLY PEAK CREDIT OUGHT TO BE TAKEN IN TO CONSIDERATION WHICH AMOUNTED TO RS. 4,80,197/-.THE ASSESSEE FURTHER STA TED THAT THE SOURCE OF THIS AMOUNT WAS FROM THE SALE OF EIGHT BUFFALOES AMOUNT ING TO RS. 2,11,550/- , FROM SALE OF GOLD ORNAMENTS AMOUNTING TO RS. 62,653/- AN D AGRICULTURAL LEASE INCOME OF RS. 1,60,000/- . THE AO DID NOT AGREE WITH THE E XPLANATION OF THE ASSESSEE AND ADDED THE ENTIRE AMOUNT OF RS. 18,77,550/- AS INCOM E FROM THE UNDISCLOSED SOURCES. FURTHER THE AO MADE ANOTHER ADDITION OF RS . 50,000/- WHICH THE ASSESSEE CLAIMED TO HAVE RECEIVED FROM ONE SH. PAWA N KUMAR, UNDER SECTION 68 OF THE INCOME TAX ACT. IN APPEAL BEFORE THE LD. CIT(A), KARNAL, THE ORDER OF THE LD. AO WAS UPHELD AND ALL THE ADDITIONS MADE WE RE CONFIRMED BY THE LD. CIT(A). ON RECEIPT OF THE ORDER OF THE LD. CIT(A) T HE AO LEVIED PENALTY UNDER SECTION 271(1)(C) ON ALL THE ADDITIONS MADE. THE MA TTER WAS CARRIED IN APPEAL BEFORE THE LD. CIT(A) BEFORE WHOM THE ASSESSEE PROD UCED THE ORDER OF THE HONBLE ITAT, CHANDIGARH BENCH ISSUED ON THE QUAN TUM ORDER UNDER SECTION 143(3) IN THE ASSESSEES CASE, WHEREBY THE ITAT ACCE PTED THE PEAK CREDIT THEORY AND RESTRICTED THE POSSIBLE ADDITION TO RS. 4,80,19 7/-.THEREAFTER THE ITAT DIRECTED REDUCING THEREFROM THE INTEREST EARNED BY THE ASSES SEE OF RS. 2513/- FROM THE 3 BANK WHICH WAS DULY OFFERED IN THE RETURN OF INCOME OF THE ASSESSEE ,THE OPENING BALANCE IN THE BANK OF RS. 69,184/-AND RS.1 ,50,000/- ON ACCOUNT OF SOURCE OF DEPOSIT FROM AGRICULTURAL LEASE AND SALE OF BUFFALOES AND THE BALANCE ADDITION WAS CONFIRMED BY THE ITAT.FURTHER THE ITAT ALSO UPHELD THE ADDITION OF RS. 50,000/- UNDER SECTION 68, SINCE THE ASSESSEE H AD FAILED TO PROVE THE GENUINENESS OF THIS CREDIT. AFTER TAKING INTO CONSI DERATION THE ORDER OF THE HONBLE ITAT IN QUANTUM PROCEEDINGS THE LD. CIT(A) UPHELD THE PENALTY LEVIED TO THE EXTENT OF ADDITION OF RS. 3,71,153/- WHICH WAS CONFIRMED BY THE HONBLE ITAT. 3. AGGRIEVED BY THE SAME THE ASSESSEE FILED THE PRE SENT APPEAL BEFORE US. 4. BEFORE US LD. AR PLEADED THAT NO PENALTY IS LEVI ABLE IN THE PRESENT CASE SINCE THE ASSESSEE HAD OFFERED EXPLANATION FOR THE SOURCE OF DEPOSIT IN THE BANK WHICH THOUGH NOT PROVED TO THE SATISFACTION OF THE REVENUE HAD NOT BEEN PROVED TO BE FALSE OR INCORRECT ALSO. AT THE OUTSE T LD. AR STATED THAT THE ADDITION CONFIRMED BY THE HONBLE ITAT AMOUNTED TO RS. 3,08,500/- AND NOT RS.3,71,153/- AS HELD BY THE LD. CIT(A). LD. AR DRE W OUR ATTENTION TO PAGE NO. 10 AND 11 OF THE ORDER OF ITAT PASSED IN QUANTUM PROCE EDINGS, WHEREBY THE ADDITION ON ACCOUNT OF UNEXPLAINED DEPOSIT IN BANK WAS WORKED OUT AT RS. 2,58,500/- AND ON ACCOUNT OF UNEXPLAINED CASH CREDI T AT RS.50,000/-.THUS LD. AR CONTENDED THAT PENALTY IF ANY LEVIABLE WAS TO BE RE STRICTED TO THESE ADDITIONS OF RS 3,08,500/-. LD. AR FURTHER CONTENDED THAT DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE HAD EXPLAINED THE SOURCE O F DEPOSIT IN THE BANK. LD. AR STATED THAT AS PER THE PEAK DEPOSIT THEORY THE A SSESSEE HAD DEPOSITED AN AMOUNT OF RS. 4,80,197/- IN THE BANK WHICH HAS BEEN DULY ACCEPTED BY THE HONBLE ITAT ALSO VIDE ITS ORDER PASSED IN QUANTUM PROCEEDING ON 17/10/2012. THE LD. AR FURTHER STATED THAT THE SOURCE OF THESE DEPOSITS WAS EXPLAINED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDING AS RS. 2, 11,550/- FROM THE SALE OF 8 4 BUFFALOES , RS. 62,653/- FROM THE SALE OF GOLD ORNA MENTS AND RS. 80,000 FROM AGRICULTURAL INCOME. LD. AR DREW OUR ATTENTION TO T HE CHART EXPLAINING THE SOURCE OF PEAK DEPOSIT IN THE BANK SUBMITTED BY THE ASSESS EE AND REPRODUCED BY THE HONBLE ITAT IN ITS ORDER IN THE QUANTUM PROCEEDING AT PAGE NO. 5. THE LD. AR FURTHER STATED THAT THE ASSESSEE ALSO HAD OPENING B ANK BALANCE OF RS. 69,184/- AND CASH BALANCE OF RS.80,000/- AND HAD EARNED INTE REST FROM THE BANK AMOUNTING TO RS. 2513/-WHICH WAS UTILISED FOR DEPOS ITING IN BANK AND LATER ON WITHDRAWN. LD. AR SUBMITTED THAT HONBLE ITAT HAD A CCEPTED THE EXPLANATION OF THE SOURCE OF DEPOSIT VIS A-VIS INTEREST FROM B ANK AMOUNTING TO RS. 2513/-, OPENING BANK BALANCE AMOUNTING TO RS. 69,184/- AND OPENING CASH BALANCE ,AGRICULTURAL INCOME AND INCOME EARNED FROM THE SAL E OF BUFFALOES TO THE EXTENT OF RS. 1,50,000/- ONLY AND REJECTED THE REST OF THE EXPLANATION OFFERED BY THE ASSESSEE. 5. LD. AR CONTENDED THAT AS REGARDS THE SOURCE OF DEPOSIT ATTRIBUTED TO SALE OF GOLD ORNAMENTS OF RS. 62,653/- ,THE ASSESSEE HAD PRODUCED THE BILL FOR THE SALE OF JEWELLERY AS PROOF OF THE SAME AND THE INSPECTOR COULD NOT LOCATE THE JEWELLER AT THE GIVEN ADDRESS SINCE HE HAD ALREADY CLOSED HI S SHOP.LD. AR STATED THAT THE ASSESSEE IN SUCH CIRCUMSTANCES SHOULD NOT BE HELD RESPONSIBLE FOR THE SAME. THE LD. AR STATED THAT THE HONBLE ITAT REJECTED TH E CONTENTION OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE HAD NOT DISCHARGED HIS BURDEN OF PRODUCING THOSE JEWELLERS AGAINST WHOM LETTERS WRITTEN BY THE AO WAS RETURNED UNDELIVERED. THE LD. AR STATED THAT THE SOURCE OF D EPOSIT FROM THE SALE OF JEWELLERY HAD BEEN PROVED BY THE ASSESSEE TO THE BE ST OF HIS ABILITY AND SINCE THE JEWELER HAD CLOSED HIS SHOP, NO FURTHER CONFIRM ATION OR EVIDENCE COULD BE PRODUCED TO CONFIRM THE SALE OF JEWELLERY. LD. AR P LEADED THAT IT IS NOT THE CASE OF THE AO THAT THE BILL PRODUCED WAS NOT GENUINE OR IT WAS BOGUS. IN SUCH CIRCUMSTANCES WHERE THE ASSESSEE HAD GIVEN A PLAUSI BLE EXPLANATION, WHICH 5 WAS ALSO SUBSTANTITATED, PENALTY COULD NOT LEVIED M ERELY BECAUSE ADDITION WAS SUSTAINED IN QUANTUM PROCEEDINGS MORESO IN THE ABSE NCE OF ANY FINDING OF FACT THAT THE EXPLANATION OF THE ASSESSEE WAS FALSE. LD. AR FURTHER STATED THAT THE EXPLANATION OF THE ASSESSEE REGARDING THE DEPOSIT IN THE BANK ACCOUNT FROM THE SALE OF BUFFALOES,LEAS E INCOME OF AGRICULTURE AND FROM CASH IN HAND, HAD BEEN ACCEPTED BY THE ITAT BU T HAD BEEN RESTRICTED TO 1,50,000/- ON LUMPSUM BASIS.LD. AR DREW OUR ATTENTI ON TO THE FINDINGS OF THE HONBLE ITAT IN THIS RESPECT AT PAGE 11 OF THE ORDE R WHEREIN IT WAS HELD AS FOLLOWS: HOWEVER, AS FAR AS OPENING CASH AVAILABLE AND AGRI CULTURAL INCOME AND SALE OF BUFFALOES IS CONCERNED, THERE SEEMS TO BE SOME TRUT H IN SUCH SUBMISSIONS. HOWEVER, THERE WERE SOME INCONSISTENCIES AS RECORDE D BY THE AO OR THE LD. CIT(A) SO SOURCE OF FUNDS FROM THESE ITEMS CANNOT B E ACCEPTED AS SUCH. IN OUR OPINION, IN THESE CIRCUMSTANCES IT WILL BE PROPER T HAT A LUMP SUM SOURCE OF RS. 1,50,000/- ARE ACCEPTED. LD. AR STATED THAT IT IS CLEAR THAT THE HONBLE ITA T HAD ACCEPTED THE EXPLANATION FILED BY THE ASSESSEE BUT HAD RESTRICTED THE SAME T O RS. 1,50,000/- ON AN ADHOC BASIS ONLY, IN SUCH CIRCUMSTANCES THE LD. AR STATED IT CANNOT BE HELD THAT THE EXPLANATION FILED BY THE ASSESSEE WAS FALSE OR UNSU BSTANTIATED AND THEREFORE LEVY OF PENALTY IN SUCH CIRCUMSTANCES WAS UNJUSTIFI ED. LD. AR STATED THAT IN VIEW OF THE ABOVE, THE EXPLAN ATIONS OF THE ASSESSEE HAVING NOT BEEN PROVED FALSE BY THE AO, PENALTY ON THE ADD ITION SUSTAINED IN QUANTUM PROCEEDINGS COULD NOT BE LEVIED. LD. AR STATED THAT THE ASSESSEE HAD NEITHER CONCEALED NOR FURNISHED ANY INACCURATE PARTICULARS OF INCOME AND MOREOVER THE ASSESSEE HAD FILED A PLAUSIBLE AND LOGICAL EXPL ANATION WHICH WAS DULY SUBSTANTIATED, THEREFORE HE PLEADED THAT THE PENALT Y LEVIED WAS BAD. ON THE ADDITION MADE ON ACCOUNT OF UNEXPLAINED CASH CREDIT OF RS. 50,000/- ,LD. AR STATED THAT PENALTY COULD NOT BE LEVIED SINCE THE A DDITION HAD BEEN MADE U/S 68 OF THE INCOME TAX ACT.1961. 6. LD. DR ON THE OTHER HAND RELIED UPON THE ORDER O F THE AUTHORITIES BELOW. 6 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL PLACED BEFORE US AS ALSO THE ORDERS OF AUTHORITIES BELOW. 8. WE FIND THAT PRIMARILY TWO ISSUES ARISE FOR ADJU DICATION IN THE PRESENT CASE: 1.WHETHER ADDITION UPHELD BY THE ITAT, ON WHICH PEN ALTY IS LEVIABLE,IS RS.3,71,153/- AS HELD BY THE LD.CIT(A) OR RS.2,58, 500/- AS CLAIMED BY THE ASSESSEE. AND, 2.WHETHER PENALTY/S 271(C) IS LEVIABLE ON THE ADDIT ION UPHELD. WITH RESPECT TO THE QUANTUM OF ADDITION UPHELD BY T HE ITAT THE ARGUMENT OF THE LD. DR IS THAT THE ADDITIONS UPHELD WERE AS FOLLOWS : 1 THE ADDITION CONFIRMED ON ACCOUNT OF PEAK DEPOSIT IN PARA 11 2,58,500/- 2 ADDITION CONFIRMED ON ACCOUNT OF THE GENUINENESS AND CREDIT WORTHINESS OF THE LOAN NOT PROVED 50,000/- 3 ADDITON ON ACCOUNT OF NON-ACCEPTANCE OF THE PLEA OF THE ASSESSEE REGARDING SALE OF JEWELLERY OF RS.62,6 53/- AS MENTIONED IN PARA 11 OF THE ITAT ORDER 62,653/- TOTAL 3,71,153/- WHILE AS PER THE LD.AR THE ITAT HAD UPHELD ADDITION S ON THE FIRST TWO COUNTS ONLY,THE ADDITION ON ACCOUNT OF SALE OF JEWELLERY B EING INCLUDED IN THE PEAK CREDIT ADDITION OF RS.2,58,000/- 9. ON GOING THROUGH THE ORDER OF THE HONBLE ITAT , WE FIND MERIT IN THE CONTENTION OF THE LD.AR THAT THE ADDITION UPHELD BY THE ITAT WAS ONLY TO THE EXTENT OF RS.3,08,500/-. WE FIND THAT THE HONBLE ITAT ,AT PARA 11 OF ITS O RDER PASSED IN QUANTUM APPEAL, UPHELD THE ADDITION ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS IN BANK OF RS.2,58,500/-,AFTER ACCEPTING THE PEAK DEPOSIT THEO RY, AS FOLLOWS: TOTAL PEAK DEPOSIT RS. 4,80,197/- LESS: OPENING BALANCE RS. 59,184/- INTEREST : RS. 2513/- ESTIMATED SOURCE OF CASH 1,50,000/- 2,21,697/- RS. 2,21,697/- BALANCE UNEXPLAINED DEPOSIT RS. 2,58,500/- 7 FURTHER,WE FIND THAT THE ASSESSEE HAD EXPLAINED TH E SOURCE OF PEAK DEPOSIT IN THE BANK OF RS. 4,80,197/- REPRODUCED AT PAGE 5 OF THE ORDER OF THE ITAT AS FOLLOWS: PARTICULARS AMOUNT (RS. ) MAXIMUM BANK BALANCE DURING THE YEAR 4,80,197/- LESS: INTEREST FROM BANK (ALREADY DECLARED IN RETURN) 2513/- MAX AMOUNT ROTATED 4,77,684 SOURCE OF AMOUNT OPENING BANK BALANCE 69,184/- OP. CASH IN HAND (CASH FLOW STATEMENT ALREADY SUBMITTED) 80,000/- SALE OF GOLD ORNAMENTS 62653/- OUT OF AGRICULTURAL INCOME (DECLARED IN THE RETURN) 80,000/- SALE OF BUFFALOS 2,11,550/- TOTAL 503387/- A COMPARISON OF THE TWO TABLES REVEALS THAT THE ADD ITION OF RS. 2,58,500/- HAS BEEN MADE ON ACCOUNT OF THE FACT THAT THEHONBLE TR IBUNAL REJECTED THE EXPLANATION OF SOURCE FILED BY THE ASSESSEE WITH REGARD TO OPENING CASH IN HAND OF RS. 80,000/-, SALE OF GOLD ORNAMENT OF RS. 62,653/-,& AGRICULTURAL INCOME AND INCOME EARNED FROM THE SALE OF BUFFALOES TO THE EXTENT OF RS.1,41,500/- (80,000+2,11500-1,50,000).THUS THE ADDITION OF RS.2 ,58,500/-ALREADY INCLUDES ADDITION ON ACCOUNT OF REJECTION OF EXPLANATION OF THE ASSESSEE OF SOURCE OF CASH DEPOSIT VIS--VIS SALE OF GOLD ORNAMENTS.WE TH EREFORE HOLD THAT NO SEPARATE ADDITION ON ACCOUNT OF THE SAME IS TO BE MADE AND T HE LD CIT(A) HAD ERRED TO THIS EXTENT.THUS IT IS HELD THAT PENALTY IF ANY LEV IABLE IS TO BE ON AN AMOUNT OF RS.3,08,,500/-ONLY AND NOT RS. 3,71,153/- AS HELD B Y THE CIT(A). AS REGARDS THE LEVY OF PENALTY ON THE ADDITIONS UPH ELD,THE FACTS WHICH EMERGE ARE THAT PENALTY HAS BEEN LEVIED ON ACCOUNT OF THE FOLLOWING TWO ADDITIONS MADE TO THE INCOME OF THE ASSESSEE: 1.UNEXPLAINED CASH DEPOSIT IN BANK 2,58,500/- 2.UNEXPLAINED CASH CREDIT 50,000 /- ------------------ 3,08,500/- ------------------- 8 FURTHER ADDITION MADE ON ACCOUNT OF UNEXPLAINED CAS H DEPOSIT IN BANK IS OUT OF THE FOLLOWING SOURCES: 1.SALE OF GOLD ORNAMENTS 62,653/- 2.SALE OF BUFFALOES,AGRICULTURAL INCOME & 1,95,847/- OPENING CASH IN HAND ------------------ - 2,58,500/- --------------------- VIS--VIS UNEXPLAINED CASH DEPOSITS IN BANK, AMOUNT ING TO RS,2,58,500/-,WE HOLD THERE IS NO CASE FOR LEVY OF PENALTY .THE ASSESSEE WE FIND HAD EXPLAINED THE SOURCE OF INCOME IN EACH CASE AND ALSO FILED EVIDEN CES TO SUBSTANTIATE THE SAME.IT IS NOT THE CASE THAT THE EXPLANATION OF THE ASSESSEE WAS NOT FOUND CORRECT OR WAS FOUND FALSE OR NOT BONAFIDE. IN FACT IT IS A CASE WHERE THE EXPLANATIONS OF THE ASSESSEE ARE UNPROVED AT THE MO ST, BUT NOT DISPROVED. IN SUCH CIRCUMSTANCES IT CANNOT BE SAID THAT THE ASSES SEE HAD CONCEALED OR FURNISHED ANY INACCURATE PARTICULARS OF INCOME 10. WITH RESPECT TO THE EXPLANATION FILED REGARDING INCOME EARNED FORM THE SALE OF GOLD ORNAMENTS, WE FIND THAT THE ASSESSEE H AD PRODUCED ALL BILLS AS EVIDENCE OF THE SAME.LD. AO HAD DEPUTED INSPECTOR T O CONFIRM THE EVIDENCE PROCURED BY THE ASSESSEE, BUT IT WAS FOUND THAT NO JEWELER EXISTED AT THE ADDRESS GIVEN BY THE ASSESSEE. THE ASSESSEE THEREAF TER STATED THAT THE JEWELER HAD CLOSED HIS SHOP. HONBLE ITAT REJECTED THE CONT ENTION OF THE ASSESSEE BY STATING THAT THE ASSESSEE HAD NOT DISCHARGED HIS BU RDEN. WE FIND THAT THE BILLS PRODUCED BY THE ASSESSEE AS EVIDENCE OF SALE OF GOL D ORNAMENT WAS NOT CONTROVERTED BY THE LOWER AUTHORITIES NOR WAS PROVE D TO BE A BOGUS DOCUMENT. THE EXPLANATION FILED BY THE ASSESSEE CANNOT THEREF ORE BE STATED TO BE FALSE OR INCORRECT OR NOT BONAFIDE.AT BEST IT CAN BE SAID TH AT THE ASSESSEE MAY NOT HAVE BEEN ABLE TO TO PROVE HIS EXPLANATION, BUT THIS DOE S NOT AT THE SAME TIME MEANTHAT THE EXPLANATION WAS UNTRUE,FALSE OR NOT BO NAFIDE THEREFORE WE HOLD THAT THERE IS NO CAUSE FOR LEVY OF ANY PENALTY ON T HIS ACCOUNT. AS FOR THE ADDITION MADE ON ACCOUNT OF EXPLANATION FILED BY THE ASSESSEE REGARDING DEPOSIT OF MONEY IN THE BANK ACCOUNT FROM AGRICULTURAL INCOME ,WE 9 FIND THAT THE ASSESSEE FILED COPIES OF GIRDAWARI & J FORMS AS EVIDENCE.THE ASSESSEE ALSO FILED COPY OF WILL OF HIS UNCLE TO PR OVE THAT THE AGRICULTURAL LAND BELONGED TO HIM. WITH REGARD TO INCOME FROM THE SALE OF BUFFALOES , THE ASSESSEE CLAIMED TO HAVE SOLD BUFFALOES TO THE FOLLOWING PERSONS SR. NO. DATE SOLD TO NUMBER OF BUFFALO AMOUNT(RS) 1 16/04/2004 ASHWANI S/O SH. BHUSHAN 2 55,500 2 04/05/2004 SURESH S/O SHRI ARJUN DASS 2 45,600 3 01/07/2004 ZHANDU S/O SH. SOM PARKASH 2 50,250 4 24/07/2004 ASHWANI S/O SH. RAM KUMAR 2 60,200 2,11,550 OUT OF THE ABOVE FOUR PERSONS STATEMENTS OF THREE W ERE RECORDED WHO CONFIRMED PURCHASE OF BUFFALOES FROM THE ASSESSEE. AS REGARDS EXPLANATION FILED BY THE ASSESSEE REGARD ING THE AVAILABILITY OF CASH IN HAND TO THE EXTENT OF RS. 80,000/-, THE ASSESSEE ST ATED THAT BEING AN OLD PERSON AND DOING BUSINESS FOR A VERY LONG PERIOD OF TIME, RS. 80,000/- CASH IN HAND WAS A REASONABLE AMOUNT OF MONEY WHICH COULD BE AVAILAB LE IN CASH AT ANY TIME WITH THE ASSESSEE 11. WE FIND THAT NONE OF THESE EVIDENCES/EXPLANATIO NS WERE FOUND TO BE BOGUS OR FALSE. IN FACT THE HONBLE ITAT FOUND SOME TRUTH IN THE EXPLANATION OF THE ASSESSEE BUT ON ACCOUNT OF CERTAIN INCONSISTENC IES IN THE SAME ACCEPTED SOURCE OF A LUMPSUM AMOUNT OF RS.1,50,000/-.THE HON ,BLE ITAT AT PARA 11 OF ITS ORDER HAS ,WHILE ACCEPTING SO HELD AS FOLLOWS: HOWEVER, AS FAR AS OPENING CASH AVAILABLE AND AGRI CULTURAL INCOME AND SALE OF BUFFALOES IS CONCERNED, THERE SEEMS TO BE SOME TRUT H IN SUCH SUBMISSIONS. HOWEVER, THERE WERE SOME INCONSISTENCIES AS RECORDE D BY THE AO OR THE LD. CIT(A) SO SOURCE OF FUNDS FROM THESE ITEMS CANNOT B E ACCEPTED AS SUCH. IN OUR OPINION, IN THESE CIRCUMSTANCES IT WILL BE PROPER T HAT A LUMP SUM SOURCE OF RS. 1,50,000/- ARE ACCEPTED. 12. IN SUCH CIRCUMSTANCES IT CANNOT BE STATED THAT THE ASSESSEE HAD EITHER FURNISHED INACCURATE PARTICULARS OF INCOME OR CONCE ALED ANY PARTICULARS OF INCOME.THEREFORE NO PENALTY U/S 271(1) CAN BE LEVI ED ON THIS ACCOUNT. 10 RELIANCE PLACED BY LD. AR ON THE JUDGEMENT OF THE B OMBAY HIGH COURT IN THE CASE OF CIT VS UPENDRA V. MITHANI IS NOT OUT OF PLA CE,WHERE IT HAS BEEN HELD THAT IF THE ASSESSEE GIVES AN EXPLANATION WHICH IS UNPRO VED BUT NOT DISPROVED I.E IT IS NOT ACCEPTED BUT CIRCUMSTANCES DO NOT LEAD TO THE REASONABLE AND POSITIVE INFERENCE THAT THE ASSESSEES CASE IS FALSE,NO PENAL TY U/S 271(1) IS LEVIABLE. AS FAR AS THE PENALTY LEVIED ON THE ADDITION MADE UNDER SECTION 68 IS CONCERNED, THE FACTS ARE THAT A SUM OF RS. 50,000/- WAS FOUND CREDITED IN THE BANK ACCOUNT OF THE ASSESSEE, WHICH HE CLAIMED TO H AVE RECEIVED FROM ONE SH. PAWAN KUMAR. THE SAME WAS TREATED AS INCOME FROM UN DISCLOSED SOURCES U/S 68 BY THE AO. SINCE NEITHER THE BANK ACCOUNT OF THE SH . PAWAN KUMAR WAS FURNISHED NOR WAS HIS IDENTITY PROVED, NOR THE SOUR CE OF ADVANCING THE AMOUNT. THE ADDITION WAS UPHELD FOR THE ABOVE REASONS BOTH BY THE CIT(A) AND THE HONBLE ITAT ALSO. IN VIEW OF THE ABOVE FACTS WE FI ND THAT THE ASSESSEE HAD NOT DISCHARGED HIS ONUS OF EXPLAINING THE AMOUNT CREDIT ED IN THE NAME OF SH. PAWAN KUMAR, WITH RESPECT TO THE IDENTITY OF THE PE RSON, GENUINENESS OF THE TRANSACTION AND ALSO THE CREDITWORTHINESS OF THE PE RSON. IN THE CIRCUMSTANCES THE IMPUGNED SUM IS DEEMED TO BE THE INCOME OF THE ASSESSEE AND HAVING CONCEALED THE PARTICULARS RELATING TO THE SAME, PEN ALTY U/S 271(1) HAS BEEN RIGHTLY LEVIED. WE THEREFORE HOLD THAT PENALTY LEVIED ON ACCOUNT OF UNEXPLAINED CASH CREDITS IN BANK AMOUNTING TO RS.2,58,500/-BE DELETED WHILE PEN ALTY ON ADDITION MADE U/S 68 OF RS.50,000/- IS UPHELD. 13. IN THE RESULT APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (BHAVNESH SAINI) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 01/07/2016 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR