Ariel Sarees Pvt.Ltd., Surat V. The Income tax Officer,Ward-1(1), Surat

ITA 3180/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94512 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 10 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 23-09-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 15-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA SINGH
• Keywords: Unexplained cash credit; Business income; Corroborative evidences; Onus to prove
• Section: 68; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD BEFORE S/SHRI RAJPAL YADAV, JM, & MANISH BORAD, AM. ITA NO. 3180/AHD/2011 A SST. Y EAR: 2006 - 07 ARIEL SAREES PVT. LTD., C/O POONAM DYEING & PRINTING MILLS PVT. LTD., 286, GIDC, PAND ESARA, SURAT. VS INCOME - TAX OFFICER, WARD 1(1), SURAT. (APPELLANT) (RESPONDENT) PA NO. AABCA 9844N APPELLANT BY MS. URVASHI SHODHAN, AR RESPONDENT BY SHRI NARENDRA SINGH, SR.DR DATE OF HEARING: 23.9.2015 DATE OF PRONOUNCEMENT : 23 / 10 /2015 O R D E R PER MANISH BORAD, ACCOUNTANT MEMBER. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEAL) [IN SHORT CIT(A) ] I, SURAT, DATED 4.11.2011, FOR AY 2006 - 07 . THE PENALTY ORDER WAS PASSED BY THE ASSESSING OFFIC ER U/S 271(1)(C) OF THE INCOME - TAX ACT, 1961 ON 21.3.2011. FOLLOWING GROUNDS ARE RAISED IN THIS APPEAL: - 1) THAT ON THE FACT AND CIRCUMSTANCES OF THE CASE LEARNED ASSESSING OFFICER ERRED IN IMPOSING PENALTY OF RS.4,03,920/ - FOR CONCEALMENT OF INCOME BY WAY O F FURNISHING INACCURATE PARTICULARS U/S 271(1) (C) ON ACCOUNT OF UNSECURED LOAN OF RS.12,00,000/ - RECEIVED FROM SISTER CONCERN. ITA NO. 3180/AHD/2011 ASST. YEAR 2006 - 07 2 2) THE APPELLANT CRAVES LEAVE TO ADD, ALTER, DELETE OR MODIFY ANY GROUND APPEAL. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE TH AT THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF MANUFACTURING SAREES AND IT FILED ITS RETURN OF INCOME ON 3.2.2006 DECLARING A TOTAL INCOME OF RS.1,242/ - . ASSESSMENT PROCEEDINGS WERE INITIATED BY ASSESSING OFFICER BY ISSUANCE OF NOTICE U/S 143(2) WH ICH WAS SERVED ON ASSESSEE ON 12.10.2007. HOWEVER, EVEN AFTER VARIOUS OPPORTUNITIES PROVIDED TO ASSESSEE IT DID NOT TURN UP BEFORE THE ASSESSING OFFICER AND AS A RESULT, THE ASSESSING OFFICER PAS SED BEST JUDGMENT ORD ER UNDER SECTION 144 OF THE ACT, ASSESS ING THE INCOME AT RS.12,06,240/ - MAKING TWO ADDITIONS (I) AT RS.12,00,000/ - UNDER SECTION 68 FOR NOT ESTABLISHING THE IDENTITY OF UNSECURED LOANS OF RS.12,00,000/ - AND (II) AT RS.5,00 0 / - INCOME FROM SALE OF SCRAPS. 3. AGAINST THE ORDER PASSED U/S 144 B Y THE ASSESSING OFFICER, ASSESSEE WENT IN APPEAL BEFORE THE CIT(A) ON ACCOUNT OF ADDITION OF RS.12,00,000/ - ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. DURING THE APPELLATE PROCEEDINGS THE ASSESSEE SUBMITTED BEFORE THE CIT(A) THAT THIS RS.12, 00,000/ - WAS TAKEN AS LOAN FROM ASSESSEE S GROUP COMPANY NAMELY M/S POONAM DYEING & PRIN T ING MILLS PVT. LTD. DURING FINANCIAL YEAR 2005 - 06 BY ACCOUNT PAYEE CHEQUE. ASSESSEE ALSO SUBMITTED THAT DUE TO HUGE LOSS SUFFERED BY THE ASSESSEE AND ITS GROUP COMPANI ES DURING FINANCIAL YEAR 2005 - 06 RESULTING THEREBY THE CLOSURE OF BUSINESS IN FINANCIAL YEAR 2006 - 07 AND DUE TO NON - AVAILABILITY OF THE STAFF TO LOOK AFTER THE AFFAIRS OF THE ITA NO. 3180/AHD/2011 ASST. YEAR 2006 - 07 3 COMPANY, PROPER REPLY WAS NOT GIVEN BEFORE THE ASSESSING OFFICER. BUT EVEN THIS S UBMISSION COULD NOT BRING ANY RELIEF TO THE ASSESSEE AND CIT(A) WITHOUT ADJUDICATING THE FACTS BROUGHT BEFORE HIM, SUSTAINED THE ADDITION MADE BY THE ASSESSING OFFICER ON THE REASON THAT DURING THE ASSESSMENT PROCEEDINGS BEFORE THE ASSESSING OFFICER, APPEL LANT FAILED TO DISCHARGE ITS ONUS TO PROVE THE IDENTITY OF THE LOANS AND GENUINENESS OF THE TRANSACTION AS ALSO THE CREDITWORTHINESS OF THE LOANS. ASSESSEE WAS NOT ABLE TO GET ANY RELIEF FROM ITAT IN THE APPEAL FILED AGAINST THE ORDER OF CIT(A). AS A RES ULT, A.O. WENT AHEAD TO INITIATE THE PENALTY PROCEEDING AND CONFIRMED THE ADDITION OF RS.12,00,000/ - ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S.68 AND THEREFORE, FRAMED ORDER ON 21.03.2011 IMPOSING THE PENALTY OF RS.4,03,920/ - . DURING COURSE OF PENALTY PRO CEEDING, ASSESSEE SUBMITTED COMPLETE DETAILS TO EXPLAIN THE CASH CREDIT OF RS.12,00,000/ - WHICH WAS LOAN TAKEN BY ACCOUNT PAYEE CHEQUE FROM ASSESSEE S SISTER CONCERN M/S POONAM DYEING & PRINTING MILLS PVT. LTD., BUT A.O. DID NOT GIVE COGNIZANCE TO THE SUBM ISSIONS, EXPLANATIONS AND SUPPORTING DOCUMENTS FILED BY THE ASSESSEE. 4. AGGRIEVED ASSESSEE WENT IN APPEAL BEFORE THE CIT(A) AGAINST THE PENALTY IMPOSED BY THE A.O. AT RS.4,03,920/ - AND AGAIN FILED ALL THE RELEVANT DETAILS BEFORE THE CIT(A), BUT WAS UNABL E TO CONVINCE CIT(A) WHO CONFIRMED THE PENALTY IMPOSED BY THE A.O. WHO OBSERVED IN HIS ORDER AS UNDER: 3.3 I HAVE CONSIDERED THE SUBMISSION MADE BY THE APPELLANT AND THE OBSERVATION OF THE A.O. NEITHER DURING THE ASSESSMENT PROCEEDINGS NOR DURING THE AP PELLATE ITA NO. 3180/AHD/2011 ASST. YEAR 2006 - 07 4 PROCEEDINGS, THE APPELLANT HAS FILED CONFIRMATION FROM M/S. POONAM DYEING & PRINTING MILLS PVT. LTD. THE APPELLANT HAS NOT GIVEN DOCUMENTARY EVIDENCE THAT THE ABOVE AMOUNT CAME THROUGH BANK OF M/S. POONAM DYEING & PRINTING MILLS PVT. LTD. THE APP ELLANT HAS, THEREFORE, FAILED TO DISCHARGE ITS ONUS TO PROVE THE IDENTITY OF THE LENDER, GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE LENDER. IF THE AMOUNT HAS COME FROM ITS GROUP COMPANY THEN WHY IT IS DIFFICULT TO FILE A CONFIRMATION FROM THE SAID COMPANY. SINCE THIS QUESTION IS UNANSWERED, THE ADDITION MADE BY THE A.O. IS CONFIRMED AND THIS GROUND OF APPEAL IS DISMISSED. 5. AGGRIEVED ASSESSEE IN NOW IN APPEAL BEFORE THE TRIBUNAL. LD. A.R. SUBMITTED THAT ASSESSEE HAS FURNISHED NECESSARY DETAILS BEFORE THE A.O. AS WELL AS CIT(A) DURING THE PENALTY PROCEEDINGS U/S.271(1)(C) BUT NONE OF LOWER AUTHORITIES HAVE LOOKED INTO THE MERITS OF THE DOCUMENTS SUBMITTED BY THE ASSESSEE AND ALSO PLACED RELIANCE ON THE DECISION OF HON BLE JURISDICTIONAL HIGH COURT IN CASE OF NATIONAL TEXTILE VS. CIT 249 ITR125 AND CIT VS. JALARAM OIL MILLS 253 ITR 192. ON OTHER HAND, LD. D.R. SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND GONE THROUGH THE FACT S AND CIRCUMSTANCES OF THE CASE AND PERUSED THE MATERIAL AVAILABLE ON RECORD . THE ISSUE IN APPEAL IS IMPOSITION OF PENALTY OF RS.4,03,920/ - BY THE A.O. AND CONFIRMED BY THE CIT(A) IN REGARD TO THE CONFIRMED ADDITION OF QUANTUM OF RS.12LACS UP TO THE LEVEL OF ITAT. ITA NO. 3180/AHD/2011 ASST. YEAR 2006 - 07 5 6.1 ASSESSM ENT PROCEEDINGS U/S.143(3) AND PENALTY PROCEEDINGS U/S.271(1)(C) ARE SEPARATE PROCEEDINGS AND THE A.O. SHOULD PASS HIS ORDER ON THE BASIS OF FACTS AND SUPPORTING EVIDENCES AVAILABLE AT THE PARTICULAR POINT OF TIME AND SHOULD NOT CO - RELATE THE TWO PROCEEDIN GS AND NOR SHOULD HAVE A PRE - DETERMINED VIEW TAKEN BY HIM IN THE PREVIOUS PROCEEDINGS. IN THE CASE UNDER APPEAL, A.O. MADE ADDITION OF RS.12LACS IN HIS ORDER PASSED U/S.144 ON ACCOUNT OF UNEXPLAINED CASH CREDIT DUE TO NON SUBMISSION OF ANY DETAILS BY THE ASSESSEE. HOWEVER, WHEN THE A.O. WAS PASSING THE ORDER U/S.271(1)(C), HE SHOULD HAVE GIVEN COGNIZANCE TO THE RELEVANT SUPPORTING EVIDENCE FURNISHED BY THE ASSESSEE TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE UNSECURED LOAN TAKEN. TO T HE CONTRARY, A.O. DID NOT FIND IT RELEVANT TO EXAMINE THESE DOCUMENTS TO FINALIZE THE PENALTY PROCEEDINGS RATHER KEEPING THE SAME VIEW AS TAKEN DURING PROCEEDINGS U/S.1 4 4 OF THE ACT THAT THE ASSESSEE HAS NOT FURNISHED THE REQUIRED DETAILS AT THE TIME OF RE GULAR ASSESSMENT PROCEEDINGS. FURTHER, HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF NATIONAL TEXTILE VS. CIT (SUPRA) HAS HELD AS UNDER : - THE PROVISIONS OF SECTION 68 OF THE INCOME - TAX ACT, 1961, PERMITTING THE ASSESSING OFFICER TO TREAT UNEXPLAINED CASH CREDITS AS INCOME ARE ENABLING PROVISIONS FOR MAKING CERTAIN ADDITIONS WHERE THERE IS FAILURE BY THE ASSESSEE TO GIVE AN EXPLANATION OR WHERE THE EXPLANATION IS NOT TO THE SATISFACTION OF THE ASSESSING OFFICER. HOWEVER, THE ADDITION MADE ON THIS COUN T WOULD NOT AUTOMATICALLY JUSTIFY IMPOSITION OF PENALTY UNDER SECTION 271(1)(C) OF THE INCOME - TAX ACT, 1961, BY RECOURSE ONLY TO EXPLANATION 1 BELOW SECTION 271(1)(C). ITA NO. 3180/AHD/2011 ASST. YEAR 2006 - 07 6 IN ORDER TO JUSTIFY THE LEVY OF PENALTY, TWO FACTORS MUST CO - EXIST, (I) THERE MUST BE SOME MATERIAL OR CIRCUMSTANCES LEADING TO THE REASONABLE CONCLUSION THAT THE AMOUNT DOES REPRESENT THE ASSESSEE S INCOME. IT IS NOT ENOUGH FOR THE PURPOSE OF PENALTY THAT THE AMOUNT HAS BEEN ASSESSED AS INCOME, AND (II) THE CIRCUMSTANCES MUST SHOW THAT TH ERE WAS ANIMUS, I.E. CONSCIOUS CONCEALMENT OR ACT OF FURNISHING OF INACCURATE PARTICULARS ON THE PART OF THE ASSESSEE. EXPLANATION 1 TO SECTION 271(1)(C) HAS NO BEARING ON FACTOR NO.1 BUT HAS A BEARING ONLY ON FACTOR NO.2. THE EXPLANATION DOES NOT MAKE THE ASSESSMENT ORDER CONCLUSIVE EVIDENCE THAT THE AMOUNT ASSESSED WAS IN FACT THE INCOME OF THE ASSESSEE. NO PENALTY CAN BE IMPOSED IF THE FACTS AND CIRCUMSTANCES ARE EQUALLY CONSISTENT WITH THE HYPOTHESIS THAT THE AMOUNT DOES NOT REPRESENT CONCEALED INCOME W ITH THE HYPOTHESIS THAT IT DOES. IF THE ASSESSEE GIVES AN EXPLANATION WHICH IS UNPROVED BUT NOT DISPROVED, I.E. IT IS NOT ACCEPTED BUT CIRCUMSTANCES DO NOT LEAD TO THE REASONABLE AND POSITIVE INFERENCE THAT THE ASSESSEE S CASE IS FALSE, THE EXPLANATION CA NNOT HELP THE DEPARTMENT BECAUSE THERE WILL BE NO MATERIAL TO SHOW THAT THE AMOUNT IN QUESTION WAS THE INCOME OF THE ASSESSEE. ALTERNATIVELY, TREATING THE EXPLANATION AS DEALING WITH BOTH THE INGREDIENTS (I) AND (II) ABOVE, WHERE THE CIRCUMSTANCES DO NOT L EAD TO THE REASONABLE AND POSITIVE INFERENCE THAT THE ASSESSEE S EXPLANATION IS FALSE, THE ASSESSEE MUST BE HELD TO HAVE PROVED THAT THERE WAS NO MENS REA OR GUILTY MIND ON HIS PART. EVEN IN THIS VIEW OF THE MATTER THE EXPLANATION ALONE CANNOT JUSTIFY LEVY OF PENALTY. ABSENCE OF PROOF ACCEPTABLE TO THE DEPARTMENT CANNOT BE EQUATED WITH FRAUD OR WILLFUL DEFAULT. HELD, THAT IN THE INSTANT CASE THE CASH CREDITS WERE NOT SATISFACTORILY EXPLAINED BY EVIDENCE AND DOCUMENTS. THE PARTIES WHO HAD ADVANCED THE ALLE GED TEMPORARY LOANS WERE NEITHER DISCLOSED NOR WERE THERE ANY SUPPORTING DOCUMENTS ON RECORD. THE ACCOUNTANT, WHO HAD ARRANGED THE LOANS WAS NOT PRODUCED AND IT WAS STATED THAT HE HAD LEFT THE SERVICE AS RELATIONS WITH HIM WERE STRAINED. IN THIS STATE OF A CCOUNTS AND EVIDENCE IN THE QUANTUM PROCEEDINGS, THE DEPARTMENT WAS JUSTIFIED IN TREATING THE CASH CREDITS AS INCOME OF THE ASSESSEE BUT MERELY ON THAT BASIS BY RECOURSE TO EXPLANATION 1, PENALTY ITA NO. 3180/AHD/2011 ASST. YEAR 2006 - 07 7 UNDER SECTION 271(1)(C) COULD NOT HAVE BEEN IMPOSED WITHOUT THE DEPARTMENT MAKING ANY OTHER EFFORT TO COME TO THE CONCLUSION THAT THE CASH CREDITS COULD IN NO CIRCUMSTANCES HAVE BEEN AMOUNTS RECEIVED AS TEMPORARY LOANS FROM VARIOUS PARTIES. ADMITTEDLY THE ASSESSEE IN THE QUANTUM PROCEEDINGS FAILED TO PRODUCE THE AC COUNTANT BUT THE DEPARTMENT ALSO IN PENALTY PROCEEDINGS MADE NO EFFORT TO SUMMON HIM. THEREFORE, IT WAS A CASE WHERE THERE WAS NO CIRCUMSTANCES TO LEAD TO A REASONABLE AND POSITIVE INFERENCE THAT THE EXPLANATION THAT CASH CREDITS WERE ARRANGED AS TEMPORARY LOANS WAS FALSE. THE FACTS AND CIRCUMSTANCES WERE EQUALLY CONSISTENT WITH THE HYPOTHESIS THAT THEY COULD HAVE BEEN SUNDRY LOANS IN SMALL AMOUNTS OBTAINED FROM DIFFERENT PARTIES. THEREFORE, THE IMPOSITION OF PENALTY WAS NOT JUSTIFIED. IN THE CASE OF CI T VS. JALARAM OIL MILLS (SUPRA) , HON BLE JURISDICTIONAL HIGH COURT HAS HELD AS UNDER : - THE EXPLANATION TO SECTION 271(1)(C) OF THE INCOME - TAX ACT, 1961, PROVIDES THAT IN CASE THERE IS A DIFFERENCE, AS STATUTORILY PROVIDED, BETWEEN THE TOTAL INCOME RET URNED BY ANY PERSON AND THE INCOME ASSESSED, SUCH PERSON SHALL HAVE TO PROVE THAT THE FAILURE TO RETURN THE CORRECT INCOME WAS NOT DUE TO ANY FRAUD OR ANY GROSS OR WILLFUL NEGLECT ON HIS PART. IN THE ABSENCE OF SUCH BURDEN BEING DISCHARGED BY THE PERSON CO NCERNED IT WILL BE DEEMED THAT PARTICULARS OF INCOME HAVE BEEN CONCEALED OR INACCURATE PARTICULARS OF INCOME HAVE BEEN FURNISHED FOR THE PURPOSE OF SECTION 271(1)(C). THE EXPLANATION RAISES A REBUTTABLE PRESUMPTION AND THE BURDEN WHICH IS CAST ON AN ASSESS EE IS AKIN TO A CIVIL BURDEN WHICH MAY BE DISCHARGED ON A PREPONDERANCE OF PROBABILITIES. SECTION 68 PROVIDES THAT WHERE A SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR, AND WHERE THE EXPLANATION OFFERED BY THE ASSESSEE ABOUT THE NATURE AND SOURCE OF SUCH CREDITS IS NOT FOUND TO BE SATISFACTORY, THE SUM SO CREDITED MAY BE CHARGED AS THE INCOME OF THE ASSESSEE FOR THAT PREVIOUS YEAR. THE WORD MAY HAS BEEN USED IN SECTION 68 ITA NO. 3180/AHD/2011 ASST. YEAR 2006 - 07 8 AND SO IF AN ADDITION IS NOT WARRANTED IN EACH AND EVERY CASE, THERE CANNOT BE A SITUATION WHERE, MERELY BECAUSE AN ADDITION HAS BEEN MADE BY INVOKING THE PROVISIONS OF SECTION 68 OF THE ACT, PENALTY UNDER SECTION 271(1)(C) OF THE ACT WOULD FOLLOW AS A NATURAL COROLLARY. HELD ACCORDINGLY, THAT IN THE PRESENT CASE, ON THE BASIS OF THE ASSESSEE AGREEING TO HAVE CREDIT ENTRIES IN ITS BOOKS OF ACCOUNT TREATED AS ITS INCOME BY VIRTUE OF THE PROVISIONS OF SECTION 68 OF THE ACT, THE SAID SUMS WOULD BE DEEMED TO BE INCOME OF THE YEAR UNDER CONSIDERATION. HOWE VER, DE HORS THE SAID PROVISION, IT WAS NOT POSSIBLE TO STATE WITH CERTAINTY THAT THE SAID SUMS WOULD BE CONCEALED INCOME OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. THE TRIBUNAL HAD RECORDED A FINDING OF FACT TO THE EFFECT THAT THERE WAS NO PAST H ISTORY OF THE ASSESSEE TO SHOW THAT THE ASSESSEE HAD BEEN EARNING BUSINESS INCOME OUTSIDE THE BOOKS, NOR WAS THERE IN THE BOOKS RELATING TO THE YEAR UNDER CONSIDERATION ANY INSTANCE POINTED OUT INDICATING ANY TRANSACTION OUTSIDE THE BOOKS. THE TRIBUNAL WAS JUSTIFIED IN HOLDING THAT THE PENALTY OF RS.30,000 IMPOSED BY THE INSPECTING ASSISTANT COMMISSIONER UNDER SECTION 271(1)(C) COULD NOT BE SUSTAINED. FROM THE RATIO OF ABOVE DECISIONS, IT EMERGES THAT IN ORDER TO JUSTIFY THE LEVY OF PENALTY TWO FACTORS MU ST CO - EXIST; (I) THERE MUST BE SOME MATERIAL OR CIRCUMSTANCES LEADING TO THE REASONABLE CONCLUSION THAT THE AMOUNT DOES REPRESENT THE ASSESSEE S INCOME. IT IS NOT ENOUGH FOR THE PURPOSE OF PENALTY THAT THE AMOUNT HAS BEEN ASSESSED AS INCOME, AND (II) THE C IRCUMSTANCES MUST SHOW THAT THERE WAS ANIMUS, I.E. CONSCIOUS CONCEALMENT OR ACT OF FURNISHING OF INACCURATE PARTICULARS ON THE PART OF THE ASSESSEE. IN THE CASE OF ASSESSEE WHO WAS HAVING A SUFFICIENT REASON FOR HIS NON APPEARANCE BEFORE THE A.O. DURING ASSESSMENT PROCEEDINGS U/S.143(3) R.W.S 144 DUE TO HEAVY LOSSES, CLOSURE OF BUSINESS AND AC U T E SHORTAGE OF STAFFS, ITA NO. 3180/AHD/2011 ASST. YEAR 2006 - 07 9 FOR WHICH, QUANTUM HAS BEEN DECIDED AGAINST HIM UP TO THE LEVEL OF TRIBUNAL. HOWEVER, DURING PENALTY PROCEEDINGS INITIATED U/S.271(1)(C), A SSESSEE HAS FURNISHED COMPLETE DETAILS OF THE UNSECURED LOAN OF RS.12 LACS TAKEN BY ACCOUNT PAYEE CHEQUE FROM ITS SISTER CONCERN M/S POONAM DYEING & PRINTING MILLS PVT. LTD. BUT, A.O. AS WELL AS CIT(A) HAS NOT GIVEN COGNIZANCE TO THE DOCUMENTS AVAILABLE O N RECORD AND DECIDED THE ISSUE ON THE BASIS OF THEIR OBSERVATIONS MADE DURING ASSESSMENT AND APPELLATE PROCEEDINGS IN REGARD TO ORIGINAL ADDITIONS MADE BY A.O. 6.2 WE, THEREFORE, RESPECTFULLY, RELYING UPON THE DECISION S OF HON BLE JURISDICTIONAL HIGH CO URT IN CASE OF NATIONAL TEXTILE VS. CIT (SUPRA) AND CIT VS. JALARAM OIL MILLS (SUPRA) AS WELL AS TO OUR DISCUSSIONS MADE ABOVE , ARE OF THE CONFIRMED VIEW THAT PROCEEDINGS U/S. 271(1)(C) OF THE ACT ARE SEPARATE PROCEEDINGS AND THE OBSERVATIONS AND FINDINGS MADE DURING THE ORIGINAL ASSESSMENT PROCEEDINGS, SHOULD NOT SHADOW OVER THE PROCEEDINGS U/S.271(1)(C) OF THE ACT AND THE A.O. OUGHT TO HAVE ANALYZE D THE EVIDENCES AND SUPPORTING DOCUMENTS FURNISHED BEFORE HIM DURING THE PENALTY PROCEEDINGS U/S.271(1)(C) AN D EXAMINE D THEM IN CONSONANCE TO THE PROVISIONS OF SECTION 271(1)(C) AND ONLY IF HE IS NOT SATISFIED WITH THEM, THEN ONLY HE SHOULD INITIATE THE PENALTY AGAINST THE ASSESSEE. WE, THEREFORE, REMIT BACK THE ISSUE TO THE FILE OF A.O. WITH CLEAR DIRECTION S TO EXAMINE ON MERIT THE EVIDENCES AND SUPPORTING DOCUMENTS TO BE SUBMITTED BY ASSESSEE BEFORE HIM FOR PROVING THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE CASH CREDIT TAKEN FROM ITS SISTER CONCERN M/S POONAM DYEING & PRINTING MILLS PVT. LTD. ITA NO. 3180/AHD/2011 ASST. YEAR 2006 - 07 10 AND ACC ORDINGLY, SHOULD DECIDE THE ISSUE OF IMPOSING PENALTY U/S.271(1)(C) OF THE ACT . 7. ACCORDINGLY, THIS APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 23/10/2015 SD/ - SD/ - ( RAJP A L YADAV ) J UDICIAL MEMBER ( MANISH BORAD ) A CCOUNTANT M EMBER DATED 23/10/2015 TRUE COPY MAHATA/ - COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER DY. REGISTRAR, ITAT, AHMEDABAD