M/S. STS CHEMICALS LTD, MUMBAI ( NOW AMALGAMATED INTO PUNJAB CHEMICALS AND CROP PROTECTION LTD), MUMBAI V. THE ACIT CIR 9(3), MUMBAI

ITA 321/MUM/2008

• Counselvise Citation: 32119914 RSA 2008
• Duration Of Justice: 2 year(s) 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-06-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: J
• Next Hearing Date: 20-05-2010
• Assessment Year: 1998-1999
• Appeal Filed On: 14-01-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: L K AGRAWAL
• Assessee Lawyers: CHARUL TOPRANI
• Keywords: Unexplained cash credit; Onus to prove
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH J : MUMBAI BEFORE SHRI D.K. AGARWAL, (JM) AND SHRI R.K. PANDA ,(AM) ITA NO.321/MUM/2008 ASSESSMENT YEAR : 1998-99 STS CHEMICALS LIMITED MUMBAI (NOW AMALGAMATED INTO PUNJAB CHEMICALS AND CROP PROTECTION LIMITED) OBEROI CHAMBERS-II, 4 TH /5 TH FLOOR PLOT NO.645-646, NEW LINK ROAD ANDHERI (W) MUMBAI-400 053. ..( APPELLANT ) P.A. NO. (AAACD 1741 N) VS. ASSTT. COMMISSIONER OF INCOME TAX CIRCLE- 9(3) ROOM NO.229, AAYAKAR BHAVAN M.K. ROAD MUMBAI-400 020. ..( RESPONDENT ) APPELLANT BY : MS. CHARUL TOPRANI RESPONDENT BY : SHRI L. K. AGRAWAL O R D E R PER D.K. AGARWAL (JM). THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER DATED 21.9.2007 PASSED BY THE LD. CIT(A) FOR TH E ASSESSMENT YEAR 1998-99 PARTLY SUSTAINING THE PENALTY IMPOSED BY THE ASSESSING OFFICER U/S.271(1)(C) OF THE I.T.ACT, 1961 (THE ACT). ITA NO.321/M.08 A.Y:98-99 2 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSESSEE I S A COMPANY. THE RETURN WAS FILED DECLARING TOTAL INCOME O F RS.34,45,860/- WHICH WAS SUBSEQUENTLY REVISED AT AN INCOME OF RS.38,93,510/-. DURING THE COURSE OF ASSESSMENT PROCEEDING IT WAS INTERALIA OBSERVED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS OBTAINED UNSECURED LOANS AS PER DETAILS CONTAINED IN ANNE XURE XIII OF FORM NO.3CD OF TAX AUDIT REPORT. THE ASSESSEE WAS ASKED TO FILE ALL THE RELEVANT LOAN CONFIRMATIONS AND ALSO TO DISCHARGE IT S ONUS REGARDING CREDIT WORTHINESS AND IDENTITY OF 10 PARTIES INCLUDING NEELAM R. BHATIA RS.50,000/- AND FOUNTAIN MIX RS.1.00 LACS. THE ASSESSEE HAS MADE WRITTEN SUBMISSION VIDE LETTER DATED 11.1.2001 INTERALIA STATING AS UNDER(PAGE-6 OF ASSESSMENT ORDER) :- AS REGARDS TO LOAN PARTIES, LOAN CONFIRMATIONS INDICATION THEIR I.T. NOS. WERE FILED WITH YOU IN E ARLIER HEARING. YOU MAY SUMMON THEM TO FOR FURTHER INFORMATION. FOR YOUR INFORMATION MOST OF THE PART IES ARE THROUGH FINANCE BROKER AND WE DO NOT HAVE ANY DIREC T CONTACT WITH THEM. THE ASSESSING OFFICER AFTER CONSIDERING THE ASSESSEE'S SUBMISSION OBSERVED THAT THE BURDEN OF PROOF SQUARELY LIES ON THE ASSESSEE TO PROVE THE IDENTITY OF THE CREDITORS, THEIR CAPACITY TO ADVANCE THE LOANS AND GENUINENESS OF THE TRANSACTIONS AS HELD BY HONBLE CAL CUTTA HIGH COURT IN THE CASE OF M/S. SHANKAR INDUSTRIES VS. CIT (197 8)114 ITR 689 AND CIT VS. KORLAY TRADING CO. LTD.(1998) 232 IT R 820. THE ITA NO.321/M.08 A.Y:98-99 3 ASSESSEE HAS FAILED TO DISCHARGE THE BURDEN OF PROOF EVEN AFTER ALLOWING THE SPECIFIC OPPORTUNITY VIDE NOTICE DATED 4. 12.2000. HE FURTHER OBSERVED THAT REGARDING TWO CREDITORS NAMELY N EELAM R. BHATIA (AS PER ASSESSMENT ORDER N.B. BHATIA) AND FOUNTAIN MIX, THE ASSESSEE HAS ALTOGETHER FAILED TO FURNISH THE CONFIRMATIONS. HEN CE, IDENTITY OF THESE PARTIES HAVE NOT BEEN ESTABLISHED AT ALL AND ACCO RDINGLY HE ADDED RS.7,82,600/- U/S.68 WITH ESTIMATED DISALLOWANCE O F INTEREST RS.78,260/- AS UNEXPLAINED CASH CREDIT TO THE INCOME OF T HE ASSESSEE. THE ASSESSING OFFICER AFTER MAKING SOME OTHER ADDITIONS/ DISALLOWANCES COMPLETED THE ASSESSMENT AT AN INCOME OF RS.1,01,65,400/ - VIDE ORDER DATED 31.1.2001 PASSED U/S.143(3) OF THE ACT. O N APPEAL BEFORE THE LD. CIT(A), THE LD. CIT(A) WHILE ALLOWIN G SUBSTANTIAL RELIEF TO THE ASSESSEE CONFIRMED THE ADDITION U/S.68 ON ACCOUNT OF AB OVE CASH CREDITS OF RS.1,50,000/-. ON FURTHER APPEAL TO THE TR IBUNAL, THE TRIBUNAL WHILE OBSERVING THAT ....IN SO FAR AS THE T WO CREDITORS ARE CONCERNED, NO CONFIRMATORY LETTERS WERE FILED. THEREFOR E, THE CIT(A) HAS RIGHTLY CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER., UPHELD THE ORDER OF THE LD. CIT(A) IN THIS REGARD IN STS CHEMICALS LTD. VS. ACIT IN MA NO.570/M/2009 (IN ITA NO.9491/M/2004 & CO 224/M/2007) FOR THE ASSESSMENT YEAR 1998-99 ORDER DATE D 16.12.2009. ITA NO.321/M.08 A.Y:98-99 4 3. THE ASSESSING OFFICER WHILE PASSING THE ASSESSMENT ORDER A LSO INITIATED PENALTY PROCEEDING U/S.271(1)(C) OF THE ACT. IN RESPONSE TO NOTICE TO SHOW CAUSE AS TO WHY PENALTY U/S.271(1)(C) MAY NOT BE IMPOSED. IT WAS INTERALIA SUBMITTED BY THE ASSESSEE THAT THE ASSESSEE HAD MADE SINCERE EFFORTS TO FURNISH EVIDENCE IN RESPECT OF AFORESAID LOANS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ITSELF, THE ASSESSEE FILED A LETTER DATED 24.11.2000 OF THE FINANCE BROKER CONFIRMING THE FACT THAT THE LOAN CONFIRMATIONS FROM TH ESE TWO PARTIES COULD NOT BE OBTAINED AS THEIR ADDRESSES HAD CHANGED AND HE WAS NOT INFORMED ABOUT IT. HOWEVER, IT WAS CONFIRMED BY THE FI NANCE BROKER THAT THE SAID PARTIES HAD GRANTED LOANS TO THE ASSESSEE DU RING THE RELEVANT YEAR. THERE IS NO CASE WHATSOEVER OF HAVING CO NCEALED PARTICULARS OF INCOME OR HAVING INACCURATE PARTICULARS THE REOF. IT MAY BE NOTED THAT THE SAID LOANS WERE TAKEN BY THE ASSESSEE B Y ACCOUNT PAYEE CHEQUES AND WERE EVEN SQUARED UP DURING THE SAME YEAR. FURTHER, THE ADDRESS OF THESE PARTIES AS AVAILABLE WITH THE ASSESSEE WAS DISCLOSED IN ANNEXURE-X OF THE TAX AUDIT REPORT. FURTHER AN ADDITION MADE IN THE ASSESSMENT BY INVOKING THE PROVISI ONS OF SECTION 68 CANNOT FORM A BASIS FOR IMPOSITION OF PENALTY U/S.2 71(1)(C). THE ASSESSEE WHILE RELYING ON THE DECISION IN HINDUSTAN STEEL LTD. VS. STATE OF ORISSA (1972) 83 ITR 26 (SC) REQUESTED TO DROP THE PENALTY PROCEEDING. HOWEVER, THE ASSESSING OFFICER DID NOT ACCEPT T HE ITA NO.321/M.08 A.Y:98-99 5 ASSESSEES EXPLANATION. HE OBSERVED THAT IT IS TRITE LAW THAT MERE PAYMENT BY CHEQUE IS NOT REVERED. HE FURTHER OBSERVED THAT THE ASSESSEE HAS NOT BEEN ABLE TO ESTABLISH THE GENUINENESS OF CASH CREDITORS AND FAILED TO GIVE BONAFIDE EXPLANATION REGARDING THE OTHER ITEMS AS REQUIRED UNDER EXPLANATION-1 OF SECTION 271(1) (C). IN VIEW OF THIS, THE ASSESSEE HAS COMMITTED A DEFAULT OF CONCEALMENT OF PARTICULARS OF INCOME AND THEREFORE THE ASSESSEE IS LIABLE FOR IMPOSITION OF PENALTY U/S.271(1)(C) AND ACCORDINGLY HE IMPOSED PEN ALTY OF RS.67,300/- BEING 100% OF THE TAX SOUGHT TO BE EVADED ON THE CONCEALED INCOME OF RS.1,92,286/-, VIDE ORDER DATED 29. 3.2006 PASSED U/S.271(1)(C) OF THE ACT. 4. ON APPEAL, THE LD. CIT(A) WHILE OBSERVING THAT TH E APPELLANT HAS NOT BEEN ABLE TO PRODUCE ANY EVIDENCE IN SUPPORT OF CASH CREDIT OF RS.1.50 LACS WHICH HAS BEEN ADDED TO THE INCOME BY THE ASSE SSING OFFICER AS UNEXPLAINED CASH CREDIT U/S.68 OF THE ACT, AN D EVEN DURING THE APPELLATE PROCEEDING THE APPELLANT COULD NOT ADDU CE EVIDENCE OR SATISFACTORY EXPLANATION TO EXPLAIN THE SOURCE OF SUCH CA SH RECEIPTS, HELD THAT THE PENALTY FOR CONCEALMENT IS LEVIABLE TO T HE EXTENT OF ADDITION MADE OF RS.1.50 LACS WHICH REMAINED UNEXPLAINE D AND, HENCE, DIRECTED THE ASSESSING OFFICER TO RE-COMPUTE THE PENALTY ONLY ON THE AMOUNT OF RS.1.50 LACS BEING UNEXPLAINED CASH RECEIPT AND ACCORDINGLY PARTLY ALLOWED THE APPEAL. ITA NO.321/M.08 A.Y:98-99 6 5. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) T HE ASSESSEE IS IN APPEAL BEFORE US CHALLENGING IN BOTH THE GROUNDS THE SUSTENANCE OF PENALTY ON THE ADDITION OF RS.1.50 LACS, IMPOSED BY THE ASSESSING OFFICER U/S.271(1)(C) OF THE ACT. 6. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE A SSESSEE WHILE REITERATING THE SAME SUBMISSIONS AS SUBMITTED BEFORE THE ASSESSING OFFICER AND THE LD. CIT(A) FURTHER SUBMITS THAT IN V IEW OF THE DECISION IN CIT VS. RELIANCE PETROPRODUCTS ( P) LTD. (2010) 230 CTR (SC) 320, THE PENALTY IS NOT LEVIABLE AND HENCE, THE PENALTY SU STAINED BY THE LD. CIT(A) BE DELETED. 7. ON THE OTHER HAND THE LD. DR WHILE RELYING ON TH E ORDER OF THE ASSESSING OFFICER AND THE LD. CIT(A) ALSO RELIED ON THE D ECISION IN CIT VS. DR. A.K. SHARMA (1993) 204 ITR 62(RAJ.) AND K.P. MADHUSUDHANAN VS. CIT (2001)251 ITR 99(SC) . HE THEREFORE SUBMITS TH AT THE PENALTY IMPOSED BY THE ASSESSING OFFICER AND SUSTAINED BY THE LD. CIT(A) BE UPHELD. 8. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RI VAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. SECTIO N 68 OF THE ACT READS AS UNDER: ITA NO.321/M.08 A.Y:98-99 7 68. CASH CREDITS.--WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF AN ASSESSEE MAINTAINED FOR ANY PREVIOU S YEAR, AND THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANATION OFFERE D BY HIM IS NOT, IN THE OPINION OF THE ASSESSING OFFICER , SATISFACTORY, THE SUM SO CREDITED MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR. 9. ACCORDING TO THIS SECTION, ANY SUM FOUND CREDITED IN TH E BOOKS OF THE ASSESSEE MAINTAINED FOR A PREVIOUS YEAR MAY BE CHARGE D TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR, IF -- (I) THE ASSESSEE OFFERS NO EXPLANATION ABOUT THE NA TURE OF SOURCES OF SUCH SUM, OR (II) THE EXPLANATION OFFERED BY HIM IS, IN THE OPI NION OF THE ASSESSING OFFICER, NOT SATISFACTORY. 10. IN THE CASE BEFORE US WE FIND FROM THE ASSESSMENT ORD ER THAT IN RESPONSE TO THE ASSESSING OFFICERS LETTER DATED 4.12.2000 THE ASSESSEE VIDE LETTER DATED 11.1.2001 HAS SUBMITTED AS UNDE R :- AS REGARDS TO LOAN PARTIES, LOAN CONFIRMATIONS INDICATION THEIR I.T. NOS. WERE FILED WITH YOU IN E ARLIER HEARING. YOU MAY SUMMON THEM TO FOR FURTHER INFORMATION. FOR YOUR INFORMATION MOST OF THE PART IES ARE THROUGH FINANCE BROKER AND WE DO NOT HAVE ANY DIREC T CONTACT WITH THEM. APART FROM THIS THE ASSESSEE HAS ALSO FILED A LETTER DATED 24.11.00 FROM SHRI SURESH F. HINDUJA, A FINANCE BROKER THROUGH WHOM THE LOANS WERE TAKEN WHICH READS AS UNDER:- TO WHOMSOEVER IT MAY CONCERN, WE ARE INFORMING THAT WE ARE NOT ABLE TO COLLECT LOAN CONFIRMATION F ROM THE ITA NO.321/M.08 A.Y:98-99 8 BELOW MENTIONED PARTIES AS THEIR ADDRESSES ARE CHAN GE TO WE ARE NOT BEEN INFORMED ABOUT IT, TO STS CHEMICAL S HAVE TAKEN LOANS FROM THIS PARTIES FOR THE YEAR 97/ 98. AMT. DT. (1) FOUNTAIN MIX 1,00,000 14 .7.97 (2) NEELAM BHATIA 50,000 7 .5.97 THIS CERTIFICATE IS GIVEN TO STS CHEMICALS LTD. AT THEIR REQUEST. 11. SINCE THE ASSESSEE HAS NOT GIVEN THE CORRECT ADDRESS OF T HE DEPOSITORS, NOR FILED CONFIRMATION LETTERS AND HAS FAILE D TO PROVE THE IDENTITY, CAPACITY AND CREDITWORTHINESS OF THE LOAN CREDI TORS, THE ASSESSING OFFICER ADDED THE ABOVE AMOUNT OF CASH CREDITS I N THE INCOME OF THE ASSESSEE. ON APPEAL THE LD. CIT(A) AND TH E TRIBUNAL FOR THE SAME REASONS CONFIRMED THE ADDITION MADE BY THE ASSE SSING OFFICER. WE FURTHER FIND THAT THERE IS NO DISPUTE TH AT THE IMPUGNED PENALTY HAS BEEN IMPOSED ON THE SUSTENANCE OF SAID ADDI TION IN QUANTUM PROCEEDINGS. 12. THE RELEVANT PROVISION OF SECTION 271(1)(C) READS AS UNDER :- 271(1) IF THE ASSESSING OFFICER OR THE COMMISSIONER(APPEALS)OR THE COMMISSIONER IN THE COU RSE OF ANY PROCEEDINGS UNDER THIS ACT, IS SATISFIED THA T ANY PERSON- (C) HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. ITA NO.321/M.08 A.Y:98-99 9 A GLANCE AT THIS PROVISION WOULD SUGGEST THAT IN ORDER TO BE COVERED, THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF THE I NCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICULARS OF HIS INCOME. IN THE PRESENT CASE THE ASSESSING OFFICER HAS IMPOSED PENALTY ON THE GROUND THAT THE ASSESSEE HAS COM MITTED A DEFAULT OF CONCEALMENT OF PARTICULARS OF INCOME. 13. IN CIT VS. RELIANCE PETROPRODUCTS (P) LTD. (2010) 230 CTR (SC) 320; (2010) 322 ITR 158(SC) THE PENALTY U/S.271(1)( C) WAS IMPOSED ON DISALLOWANCE OF CERTAIN EXPENDITURE. ACCORDING TO TH E REVENUE BY MAKING INCORRECT CLAIM OF THE EXPENDITURE ON INTEREST, THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME. IT HAS B EEN HELD (HEADNOTE) AS UNDER : A GLANCE AT THE PROVISIONS OF SECTION 271(1)(C) O F THE INCOME- TAX ACT, 1961, SUGGESTS THAT IN ORDER T O BE COVERED BY IT, THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF THE INCOME OF THE ASSESSEE. SECONDL Y, THE ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICULARS OF HIS INCOME. THE MEANING OF THE WORD PARTICULARS USED IN SECTION 271(1)(C) WOULD EMBRACE THE DETAILS OF THE CLAIM MADE. WHERE NO INFORMATION GIVEN IN THE RETURN IS F OUND TO BE INCORRECT OR INACCURATE, THE ASSESSEE CANNOT BE HELD GUILTY OF FURNISHING INACCURATE PARTICULARS. IN OR DER TO EXPOSE THE ASSESSEE TO PENALTY, UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION, THE PENALTY PROVISION CAN NOT BE INVOKED. BY NO STRETCH OF IMAGINATION CAN MAKING A N INCORRECT CLAIM TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHI NG WOULD DEPEND UPON THE RETURN FILED BY THE ASSESSEE, BECAUSE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSE E CAN FURNISH THE PARTICULARS OF HIS INCOME. WHEN SUC H PARTICULARS ARE FOUND TO BE INACCURATE, THE LIABILI TY WOULD ARISE. TO ATTRACT PENALTY, THE DETAILS SUPPLIED IN THE ITA NO.321/M.08 A.Y:98-99 10 RETURN MUST NOT BE ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO THE TRUTH OR ERRONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLI ED BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCOR RECT OR ERRONEOUS OR FALSE THERE IS NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271(1)(C). A MERE MAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDI NG THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE R ETURN CANNOT AMOUNT TO FURNISHING INACCURATE PARTICULARS. 14. WHEREAS IN THE CASE BEFORE US THE ASSESSING OFFICER HA S IMPOSED PENALTY ON THE CONCEALMENT OF PARTICULARS OF INCOME, THE REFORE, THE DECISION RELIED ON BY THE LD. COUNSEL IS DISTINGUISHABLE AND NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. 15. IN DR. A.K. SHARMA (SUPRA), THE AO AFTER COMPLETI ON OF ASSESSMENT FOUND THAT THE ASSESSEE HAD RECEIVED RS.60,571/- A S CONSULTATION AND INJECTION CHARGES FROM THE EMPLOYEES OF THE POST AND TELEGRAPH DEPARTMENT BUT THE SAME HAD NOT BEEN DISCLO SED IN THE RETURN SUBMITTED. IN THE ASSESSMENT THE AO ESTIMATED THE INCOME AT A FIGURE OF RS.65,571/-. IT HAS BEEN HELD THAT IT WAS FOR THE ASSESSEE TO DISCHARGE HIS BURDEN INITIALLY. NO POSITIVE EVIDENCE HA D BEEN BROUGHT BY THE ASSESSEE TO DISCHARGE THE BURDEN OF PROVING THAT T HERE HAD BEEN NO CONCEALMENT OF INCOME. 16. IN K.P. MADHUSUDHANAN (SUPRA), THE ASSESSEE INTERALIA STATED THAT SINCE IT WAS UNABLE TO FURNISH EVIDENCE FOR SUCH LOA NS IT OFFERED THE AMOUNT OF RS.93,000/- AS ADDITIONAL INCOME. IN PEN ALTY PROCEEDING ITA NO.321/M.08 A.Y:98-99 11 THE AO NOTED THAT IT HAS OFFERED THE AMOUNT OF RS.93, 000/- AS ADDITIONAL INCOME AND APPLYING EXPLANATION 1(B) TO SE C 271 IMPOSED A PENALTY ON THE ASSESSEE. THE APPELLATE TRIBUNAL CANCELLE D THE PENALTY, INTERALIA , FOR THE REASON THAT IN THE NOTICE INITIATING PENALT Y PROCEEDINGS THE ASSESSEE WAS NOT INTIMATED ABOUT THE PROPO SED ACTION UNDER EXPLANATION 1(B) TO SECTION 271(1)(C); BUT THE HO NBLE HIGH COURT ON REFERENCE HELD THAT THE IMPOSITION OF PENAL TY WAS VALID. ON APPEAL, THE HONBLE SUPREME COURT HELD, AFFIRMING TH E DECISION OF THE HONBLE HIGH COURT THAT THE PENALTY WAS VALIDLY LEVIED FURTHER HELD THAT NO EXPRESS INVOCATION OF THE EXPLANATION TO SEC. 271 IN THE NOTICE U/S.271 IS NECESSARY BEFORE THE PROVISIONS OF THE EXPLANAT ION ARE APPLIED. 17. IN THE CASE BEFORE US EVEN AT THIS STAGE THE ASSESSEE HAS NOT PROVIDED THE ADDRESSES OF THE DEPOSITORS, FAILED TO PROV E THE IDENTITY OF THE LOAN CREDITORS, CAPACITY OF THE DEPOSITORS AND SOURCE F ROM WHERE LOAN WAS GIVEN TO THE ASSESSEE. MERELY BECAUSE THE ASSESSEE HAS FILED TAX AUDIT REPORT GIVING THE PARTICULARS OF LOAN TAK EN BY THE ASSESSEE DOES NOT MEAN THAT THE ASSESSEE HAS DISCHARGED HIS BURDEN OF PROVING THE LOAN AND THAT TOO WITHOUT PROVIDING CORRECT ADDRE SS OF THE DEPOSITORS. THIS BEING SO AND KEEPING IN VIEW THAT IN THE QUANTUM PROCEEDING THE ADDITION OF THE ABOVE LOAN CREDITORS HA S BEEN AFFIRMED UP TO THE STAGE OF TRIBUNAL, WE ARE OF THE VIEW THAT IN THE ABSENCE OF ITA NO.321/M.08 A.Y:98-99 12 ANY EVIDENCE THE SO CALLED LOAN TAKEN BY THE ASSESSEE WAS N OT BONAFIDE TRANSACTION AND HENCE, THE ASSESSEE HAS CONCEALED THE PARTICULARS OF HIS INCOME WITHIN THE MEANING OF SECTION 2 71(1)(C) OF THE ACT AND ACCORDINGLY THE PENALTY IMPOSED BY THE ASSES SING OFFICER AND SUSTAINED BY THE LD. CIT(A) IS CONFIRMED. THE GRO UNDS TAKEN BY THE ASSESSEE ARE, THEREFORE, REJECTED. 18. IN THE RESULT, THE ASSESSEES APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 4.6.2010. SD/- SD/- ( R.K. PANDA ) ( D.K. AGARWAL ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 4.6.2010. JV. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI. ITA NO.321/M.08 A.Y:98-99 13 DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 20.5.10 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 21.5.10 SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON 4.6.10 SR.PS/PS 7. FILE SENT TO THE BENCH CLERK 7.6.10 SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER