INERNATIONAL CLOTHING INDUSTRIES LTD, MUMBAI V. DCIT CIR 9(2), MUMBAI

ITA 3849/MUM/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70624 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-08-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: I
• Next Hearing Date: 05-06-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 11-05-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Onus to prove
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, MUM BAI . . , ! , '# ' $ BEFORE SHRI B. R. MITTAL, JM AND SHRI SANJAY ARORA , AM ./ I.T.A. NO.3849/MUM/2011 ( & ' (' & ' (' & ' (' & ' (' / / / / ASSESSMENT YEAR: 2003-04) INTERNATIONAL CLOTHING INDUSTRIES LTD. SHIRT HOUSE, 87, GOVT. INDUSTRIAL ESTATE, KANDIVALI (WEST), MUMBAI-400 067 & & & & / VS. DY. CIT, RANGE 9(2), MUMBAI ) '# ./ * ./ PAN/GIR NO. AAACI 0333 B ( )+ / APPELLANT ) : ( ,-)+ / RESPONDENT ) )+ . ' / APPELLANT BY : SHRI VIMAL PUNMIYA ,-)+ / . ' / RESPONDENT BY : MS. NEERAJA PRADHAN & / 01# / // / DATE OF HEARING : 05.06.2013 2 ( / 01# / DATE OF PRONOUNCEMENT : 02.08.2013 '3 / O R D E R PER SANJAY ARORA, A. M.: THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-20, MUMBAI (CIT(A) FOR SH ORT) DATED 09.03.2011, DISMISSING THE ASSESSEES APPEAL CONTESTING ITS ASSESSMENT U/S .143(3) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) FOR THE ASSESSMENT YEAR (A. Y.) 2003-04 VIDE ORDER DATED 02.11.2005. 2.1 THE FACTS OF THE CASE IN BRIEF ARE THAT THE ASS ESSEE, A COMPANY IN THE MANUFACTURING AND SALE OF READYMADE GARMENTS, FILED ITS RETURN OF INCOME FOR THE RELEVANT YEAR AT A LOSS 2 ITA NO.3849/MUM/2011 (A.Y. 2003-04) INTERNATIONAL CLOTHING INDUSTRIES LTD. VS. DY. CIT OF RS.183.65 LACS. THE FIRST ASSESSMENT U/S.143(3) WAS FRAMED AT RS.(-)150.61 LACS BY EFFECTING TWO ADDITIONS, I.E., ON ACCOUNT OF UNEXPL AINED CASH CREDITS (RS.20.50 LACS) AND DISALLOWANCE OF INTEREST (RS.12.53 LACS). THE MATTE R, AT THE INSTANCE OF BOTH THE ASSESSEE AND THE REVENUE, TRAVELLED UP TO THE TRIBUNAL, WHIC H VIDE ITS ORDER DATED 30.12.009 (IN ITA NO.5171/MUM/2008) RESTORED THE MATTER BACK TO T HE FILE OF THE ASSESSING AUTHORITY FOR VERIFICATION AND DETERMINATION AFRESH. THE ADDI TION QUA UNEXPLAINED CREDITS HAVING BEEN CONFIRMED BY THE ASSESSING OFFICER (A.O.) IN T HE SECOND ROUND, IN RESPECT OF WHICH THE PENALTY PROCEEDINGS HAD BEEN INITIATED EARLIER, SIMULTANEOUS WITH THE COMPLETION OF THE ASSESSMENT, VIDE NOTICE DATED 02.11.2005, PENAL TY PROCEEDINGS WERE REVIVED BY THE ISSUE OF NOTICES ON 15.07.2010 AND 23.07.2010. THE ASSESSEE RESPONDED VIDE LETTER DATED 28.07.2010, STATING THAT ALL THE MATERIAL FACTS HAD BEEN DISCLOSED, AND THAT THERE WAS NO CONCEALMENT OR INACCURATE FURNISHING OF PARTICULARS OF INCOME ON ITS PART. THE RELEVANT ANNEXURES TO ITS AUDIT REPORT FOR AY 2002-03 AND 20 03-04 WERE ALSO FILED. THE CREDITS APPEAR AS UNSECURED LOANS IN THE ASSESSEES BOOKS O F ACCOUNT FROM THE FOLLOWING PERSONS: I) NICK LAKHANI RS.11,00,000/- II) INDIAN TRADING CORPN. RS.3,75,000/- III) NAKUL JAIN RS.1,60,000/- IV) SAROJ GUPTA RS.1,75,000/- V) S. P. CAPITAL FINANCING LTD. RS.40,000/- VI) PREMIER ROAD SERVICES LTD. RS.2,00,000/- TOTAL RS.20,50,000/- THE FIRST APPELLATE AUTHORITY IN THE QUANTUM PROCE EDINGS (IN CHALLENGE TO THE ASSESSMENT DATED 02.11.2005) HAD IN FACT DELETED TH E ADDITION QUA TWO CREDITORS, BEING SAROJ GUPTA AND S. P. CAPITAL FINANCING LTD., ON TH E BASIS THAT THE SAID CREDITS DID NOT ARISE DURING THE RELEVANT YEAR, BUT WERE OLD BALANC ES, FORMING PART OF THE OPENING BALANCE AS ON 01.04.2002. THE ASSESSEE MAKING A SIMILAR CLA IM BEFORE THE TRIBUNAL FOR THE BALANCE LOANS AGGREGATING TO RS.18.35 LACS, FOR WHICH THE A DDITION/S WAS CONFIRMED BY THE FIRST APPELLATE AUTHORITY, IT RESTORED THE MATTER BACK TO THE A.O. TO VERIFY LIKEWISE; THE ASSESSEE CLAIMING THE SAME TO BEING ALSO BROUGHT FORWARD LOA NS, HOLDING AS: 3 ITA NO.3849/MUM/2011 (A.Y. 2003-04) INTERNATIONAL CLOTHING INDUSTRIES LTD. VS. DY. CIT 8. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), ASSES SEE PREFERRED AN APPEAL BEFORE US. THE LD. COUNSEL FOR THE ASSESS EE SHRI VIMAL PUNMIYA SUBMITTED A PAPER BOOK AND FROM WHICH WE FI ND THAT THE AMOUNT OF RS.11,00,000/- FROM SHRI NICK LAKHANI, RS .3,75,000/- FROM INDIA TRDG. CORPN., RS.1,60,000/- FROM NAKUL J AIN AND RS.2,00,000/- PREMIERE ROAD SERVICES LTD. ARE SHOWN AS OPENING BALANCE. SIMILAR TO THE FINDING OF THE LD.CIT(A) TH E CASE OF SAROJ GUPTA & S. P. CAPITAL FINANCING LTD., WE DIRECT THE AO TO VERIFY WHETHER THESE ARE OPENING BALANCES AND IF THEY ARE FOUND TO BE OPENING BALANCES THE ADDITION IS TO BE DELETED. 2.2 THE A.O., IN THE SECOND ROUND, FOUND THAT NOT O NLY THE LOANS FROM THE FOUR PARTIES FOR A TOTAL OF RS.18.35 LACS WERE CURRENT LOANS, TH E BALANCE LOANS OF RS.2.15 LACS FROM THE TWO PARTIES AFORE-REFERRED ALSO REPRESENTED FRESH L OANS OBTAINED DURING THE YEAR, SO THAT THE ADDITION CAME TO BE MADE AT RS.20.50 LACS. THE SAID FINDING REMAINS UNCHALLENGED. THE ASSESSEE HAD IN THE ASSESSMENT PROCEEDINGS FAIL ED TO PRODUCE CONFIRMATIONS FROM THE CREDITORS. EVEN NOTICES U/S.133(6) TO THEM HAD BE EN EITHER UNSERVED OR REMAINED UNRESPONDED. NO IMPROVEMENT IN ITS CASE HAD BEEN MA DE BY THE ASSESSEE IN THE PENALTY PROCEEDINGS. ACCORDINGLY, HE PROPOSED AND LEVIED PE NALTY ON THE SAME, AT THE RATE OF 100% OF THE TAX SOUGHT TO BE EVADED. 2.3 IN APPEAL, THE SAME STOOD CONFIRMED ON THE SAME BASIS. THE ONLY PLEA RAISED BY THE ASSESSEE BEFORE THE TRIBUNAL WAS THAT THAT THE UNEX PLAINED CREDITS REPRESENT OLD BALANCES. THE ASSESSEE BEING UNABLE TO SUBSTANTIATE ITS CLAIM , ITS CASE REMAINED UNPROVED, IF NOT DISPROVED. THE INGREDIENTS OF SECTION 271(1)(C) WER E SATISFIED AS THE ASSESSEE HAD NOT OFFERED ANY EXPLANATION. AGGRIEVED, THE ASSESSEE IS IN SECOND APPEAL. 3.1 BEFORE US, THE ASSESSEES CASE WAS THAT IN VIEW OF ITS INABILITY TO REPAY THE LOANS, THE LENDERS HAD FILED CRIMINAL COMPLAINTS AGAINST I T. THE SAME WOULD BY ITSELF CONFIRM THE GENUINENESS OF THE LOANS. IT WAS ON ACCOUNT OF THIS THAT THE LENDERS HAD BECOME UNCOOPERATIVE, AND WERE DISINCLINED TO ISSUE CONFIR MATION LETTERS. IN FACT, PART PAYMENTS HAD BEEN MADE TO SOME OF THE CREDITORS, AND WHICH W OULD AGAIN GO TO SHOW THAT THE LOANS REPRESENTED ACTUAL LIABILITY. ON BEING QUERIED BY T HE BENCH IF THE ASSESSEE WAS MAKING OUT A NEW CASE BEFORE THE TRIBUNAL, IT WAS SUBMITTE D BY THE LD. AR THAT THE ASSESSEE HAD 4 ITA NO.3849/MUM/2011 (A.Y. 2003-04) INTERNATIONAL CLOTHING INDUSTRIES LTD. VS. DY. CIT ALSO TAKEN THE SAID PLEA BEFORE THE LD. CIT(A), WHO THOUGH HAS NOT TAKEN COGNIZANCE OF THE SAME. HE WOULD THEN TAKE US TO THE ASSESSEES P APER-BOOK (PGS.33-47), CONTAINING IN THE MAIN COPIES OF THE LEGAL NOTICES AFORESTATED. T HE SAME WERE ALSO FURNISHED BEFORE THE AUTHORITIES BELOW. 3.2 THE LD. DR, ON THE OTHER HAND, WOULD PLACE RELI ANCE ON THE ORDERS OF THE REVENUE AUTHORITIES, CLAIMING THAT NO IMPROVEMENT IN ITS CA SE HAD BEEN MADE BY THE ASSESSEE IN THE PENALTY PROCEEDINGS; RATHER, IT SEEKING RELIEF FROM THE TRIBUNAL (IN QUANTUM PROCEEDINGS) ON THE BASIS OF A MISSTATEMENT, I.E., OF THE IMPUGNED LOANS HAVING BEEN ASSUMED OR OBTAINED IN AN EARLIER YEAR, TO VERIFY W HICH ASPECT, THEREFORE, THE MATTER STOOD RESTORED BACK TO THE A.O., ONLY TO FIND IT AS NOT S O. THE IMPUGNED PENALTY, THEREFORE, MERITS CONFIRMATION. 4. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. 4.1 IN OUR VIEW, THE ISSUE INVOLVED IS PRIMARILY FA CTUAL, I.E., WHETHER THE ASSESSEE HAS BEEN ABLE TO SATISFACTORILY PROVE THE IMPUGNED CRED ITS AS TO THEIR REPRESENTING THE ASSESSEES GENUINE LIABILITIES OR NOT. IF AND TO TH E EXTENT IT HAS BEEN, ITS RETURN OF INCOME DOES NOT BEAR ANY CONCEALMENT OR INACCURATE FURNISH ING OF ANY PARTICULARS OF INCOME, SO THAT NO PENALTY U/S.271(1)(C) COULD BE LEVIED. THE LAW PLACING THE ONUS TO PROVE THE CREDITS ON THE ASSESSEE, A FAILURE TO DO SO WOULD I NVITE ADDITION IN ITS RESPECT AS UNEXPLAINED INCOME U/S.68. FURTHER, THAT THE ADDITI ON HAS BEEN MADE UNDER THE DEEMING PROVISION OF SECTION 68 IS NO BAR FOR THE LEVY OF P ENALTY; THE SUBSTANCE OF THE INCOME BEING ACTUAL FUNDS, REFLECTED IN THE ASSESSEES OWN ACCOUNTS, AND THE LEGAL FICTION EXTENDS ONLY TO THE DEEMING THEREOF, IN THE ABSENCE OF A SA TISFACTORY EXPLANATION AS TO THEIR NATURE AND SOURCE, AS ITS INCOME. THE LEGAL POSITION IS NO T DISPUTED, CASE LAW ON WHICH IS LEGION. 4.2 SO HOWEVER, AS THE PENALTY PROCEEDINGS ARE SEPA RATE AND DISTINCT PROCEEDINGS, THE FACTUAL FINDINGS OF THE ASSESSMENT PROCEEDINGS, THO UGH RELEVANT AND PERSUASIVE, CANNOT BE CONSIDERED AS CONCLUSIVE, AND THE ASSESSEE COULD AN D, RATHER, IS OBLIGED TO FURNISH AN EXPLANATION TOWARD THE SAME. IN THIS REGARD, IN OUR VIEW, WHILE WE STRONGLY 5 ITA NO.3849/MUM/2011 (A.Y. 2003-04) INTERNATIONAL CLOTHING INDUSTRIES LTD. VS. DY. CIT DISCOUNTENANCE THE ASSESSEES CLAIM BEFORE THE TRIB UNAL IN THE QUANTUM PROCEEDINGS THAT THE LOANS WERE OBTAINED EARLIER, WHILE THEIR PART ICULARS, FORMING PART OF ITS EXPLANATION, REVEAL THE SAME TO BE DURING THE CURRENT YEAR, WHIC H IN FACT AMOUNTS TO A PERJURY. ON MERITS, WE FIND THAT THE FILING OF CRIMINAL COMPLAI NTS BY THE CREDITORS, I.E., QUA THE DISHONOR OF CHEQUES ISSUED BY THE ASSESSEE IN DISCH ARGE OF HIS LIABILITY TOWARD THE LOAN, AS STATED, WOULD CERTAINLY FORM A VALID EXPLANATION ON THE ASSESSEES PART, MITIGATING THE CHARGE OF PENALTY. AS THE ADDITION, AS WELL AS THE EXPLANATION TOWARD THE SAME, IS CREDIT SPECIFIC, WE SHALL PROCEED CREDIT-WISE, AS FOLLOWS. 4.3 WE EXAMINE THE FACTS IN RESPECT OF EACH CREDIT , AS UNDER: I) NICK LAKHANI - RS.11,00,000/- : THE CREDIT ARISES DURING THE CURRENT YEAR (ON 07.01 .2003). NO CONFIRMATION STANDS FILED EVEN IN THE PENALTY PROCEEDINGS. NOTICE U/S.1 33(6) CAME BACK UNSERVED. NO LEGAL NOTICE HAS BEEN ISSUED BY OR ON BEHALF OF THE CREDITOR, WHICH IS STATED AS A REASON BY THE ASSESSEE FOR THE CREDITORS BEING RECA LCITRANT, AND NOT ISSUING CONFIRMATIVE LETTERS. THE LD. AR, ON BEING QUESTION ED IN THIS REGARD DURING HEARING, WOULD SUBMIT THAT NO SUCH NOTICE HAS BEEN ISSUED IN THIS CASE FOR THE REASON THAT THE CREDITOR HAPPENS TO BE THE ASSESSEES FRIEND. T HE ARGUMENT IS SELF-DEFEATING INASMUCH AS THERE IS NO REASON FOR THE NON-ISSUE OF ANY CONFIRMATION LETTER IN THE FIRST PLACE IN THAT CASE. THERE IS AS SUCH NO IOTA OF EVIDENCE ON RECORD TOWARD THE GENUINENESS OF THIS CREDIT WHICH PRESUMABLY OUTSTAN DS EVEN TO DATE. THE PENALTY IN ITS RESPECT IS, THEREFORE, CONFIRMED. II) INDIAN TRADING CORPN. - RS.3,75,000/- THE CREDIT ARISES IN THE ASSESSEES BOOKS DURING TH E YEAR ON 29.05.2002 (RS.2.50 LACS) AND ON 10.06.2002 (RS.1.25 LACS). THE LEGAL N OTICE DATED 15.04.2004 TOWARD TWO DISHONORED CHEQUES FOR A TOTAL OF RS.3.75 LACS, AS WELL AS THE NOTICE FOR HEARING AND ATTENDANCE BY THE METROPOLITAN MAGISTRATE DATED 09.09.2004, ARE ON RECORD (PB PGS.60-62). THE LOANS HAVE BEEN, AS PER THE TAX AUDIT REPORT DATED 23.10.2003 FOR THE RELEVANT YEAR (PB PGS.1-16), OBTAINED PER A CCOUNT PAYEE CHEQUE/S. UNDER 6 ITA NO.3849/MUM/2011 (A.Y. 2003-04) INTERNATIONAL CLOTHING INDUSTRIES LTD. VS. DY. CIT THESE CIRCUMSTANCES, IN OUR VIEW, THE ASSESSEE HAS ADVANCED SUFFICIENT MATERIAL TOWARD THE GENUINENESS OF THE SAID CREDITS. NO CASE FOR PENALTY IS MADE OUT. WE DECIDE ACCORDINGLY. III) NAKUL JAIN - RS.1,60,000/- : A LOAN OF RS.2 LACS WAS TAKEN ON 28.09.2002 PER AN ACCOUNT PAYEE CHEQUE, OF WHICH RS.40,000/- STANDS REPAID. THE REVENUE HAS TR EATED THE BALANCE OF RS.1.60 LACS AS NOT EXPLAINED. NOW, IT CANNOT BE THAT WHILE THE AMOUNT REPAID REPRESENTS A GENUINE LOAN, THE PART OF IT WHICH CONTINUES TO OUT STAND IS NOT SO. THE ASSESSEE HAS ALSO RECEIVED LEGAL NOTICE U/S.138 DATED 19.08.2004 AND 07.09.2004 TOWARD DISHONOR OF CHEQUES ISSUED IN PART PAYMENT (AT RS.2 0,000/- EACH), QUA WHICH NOTICES FOR HEARING AND ATTENDANCE (DATED 29.11.200 4) HAVE ALSO BEEN RECEIVED FROM THE RELEVANT CRIMINAL COURT (PB PGS.56-59). TH E LEGAL NOTICES ALSO BEAR REFERENCE TO THE AMOUNT INITIALLY ADVANCED, I.E., R S.2 LACS. NO CASE FOR LEVY OF PENALTY IS CLEARLY MADE OUT. WE DECIDE ACCORDINGLY. IV) SAROJ GUPTA - RS.1,75,000/- THE A.O. FOUND ON THE BASIS OF THE TAX AUDIT REPORT FOR A.Y. 2002-03 (ANNEXURE 6 THERETO) THAT THE ENTIRE LOAN OF RS.3.50 LACS REC EIVED FROM THE SAID CREDITOR IN THAT YEAR HAD BEEN SQUARED UP. THE LOAN OF RS.1.75 LACS, I.E., TO THE EXTENT IT OUTSTANDS AS ON 31.03.2003, IS A FRESH LOAN, OBTAINED DURING THE RELEVANT PREVIOUS YEAR. IN FACT, THE STATEMENT OF LOAN FROM OTHERS FOR THE A CCOUNTING YEAR 2002-03 AS FILED BY THE ASSESSEE (PB PG.47), REFLECTS THE OPENING BA LANCE FOR THE SAID PARTY AT NIL, WITH AN ADDITION AND, CONSEQUENTLY, CLOSING BALANCE OF RS.1,75,000/-. THE ADDRESS OF THE CREDITOR AS MENTIONED THEREIN ALSO AGREES WI TH THAT AS SPECIFIED IN THE STATEMENT OF LOANS (FOR RS.40.40 LACS), FORMING PAR T OF THE BALANCE-SHEET (AS ON 31.03.2003), LISTING 19 PARTIES. THE TAX AUDIT REPO RT FOR THE CURRENT YEAR (PER ANNEXURE 6) STATES OF RS.3 LACS BEING THE LOAN RECE IVED FROM THE SAID PARTY, OF WHICH RS.1.25 LACS STANDS REPAID. THUS, THOUGH THE ASSESSEES DIFFERENT STATEMENTS ARE INCONSISTENT TO SOME EXTENT, WITHOUT DOUBT, THE IMPUGNED AMOUNT STANDS 7 ITA NO.3849/MUM/2011 (A.Y. 2003-04) INTERNATIONAL CLOTHING INDUSTRIES LTD. VS. DY. CIT RECEIVED IN THE CURRENT YEAR. NO CONFIRMATION OR, FOR THAT MATTER, ANY MATERIAL HAS BEEN FURNISHED IN RESPECT OF THE CREDIT OF RS.1.75 LACS. NOTICE U/S.133(6) TO THE CREDITOR HAS ALSO REMAINED UNRESPONDED. NO EXPLANAT ION, AGAIN, HAS BEEN ADVANCED, AND AT ANY STAGE, TOWARD THE GENUINENESS OF THIS LOAN, OR FOR THE NON- FURNISHING OF ANY EVIDENCE IN ITS RESPECT. THE ASSE SSEES ONLY EXPLANATION HAS BEEN OF THE LOAN ARISING DURING AN EARLIER YEAR, AND WHI CH HAS BEEN FOUND AND PROVED AS INCORRECT. UNDER THESE CIRCUMSTANCES, THE PENALTY S TANDS CORRECTLY LEVIED. WE UPHELD THE SAME. V) S. P. CAPITAL FINANCING LTD. - RS.40,000/- THOUGH A DOUBT HAD BEEN CREATED BY THE ASSESSEE AS TO THE YEAR OF ORIGIN OF THIS CREDIT, A REFERENCE TO THE TAX AUDIT REPORT FOR THE CURRENT YEAR AS WELL AS FOR THE IMMEDIATELY PRECEEDING YEAR (EXTRACTED IN THE PENAL TY ORDER), MAKE IT ABUNDANTLY CLEAR THAT THE SAME ARISES DURING THE CURRENT YEAR. IN FACT, THE ACTUAL AMOUNT OUTSTANDING AS ON 31.03.2003 IS RS.90,000/-. THE LE GAL NOTICE DATED 23.02.2004, STATING OF LOAN OF RS.1 LAC ON 24.06.2002, WHICH AL SO MENTIONS OF THREE CHEQUES DATED 11.10.2003 FOR AN AGGREGATE OF RS.1 LAC ISSUE D IN REPAYMENT, HOWEVER, CLEARLY BRING HOME THE FACT OF THE SAME AS REPRESEN TING AN ACTUAL LIABILITY OR THE GENUINENESS OF THE CREDIT UNDER REFERENCE. THE ASSE SSEE HAS ALSO SHOWN OF HAVING MADE REPAYMENTS POST THE CURRENT YEAR. NO CASE FOR PENALTY ARISES, AND IS, ACCORDINGLY, DELETED. VI) PREMIER ROAD SERVICES LTD. - RS.2,00,000/- THE CREDIT STANDS AVAILED ON 07.08.2002, AND RECEIV ED PER AN ACCOUNT PAYEE CHEQUE. LEGAL NOTICE DATED 10.03.2004 IS PLACED ON RECORD IN RESPECT OF DISHONOR OF CHEQUE DATED 25.01.2004 FOR RS.2 LACS (PB PG.63) . THE ASSESSEES CASE AND BONA FIDES ARE, THUS, ESTABLISHED. THE PENALTY IS, ACCORDINGL Y, DELETED. 4.4 BEFORE PARTING WITH THE ORDER, WE MAY CLARIFY T HAT THE ASSESSEE HAS PER ITS WRITTEN SUBMISSIONS CITES A HOST OF CASE LAW. THE SAID RELI ANCE, IF IT MAY BE CALLED SO, IS WITHOUT ADVERTING TO THE FACTS OF THOSE CASES AND HOW ARE T HOSE APPLICABLE AND COMPARABLE WITH 8 ITA NO.3849/MUM/2011 (A.Y. 2003-04) INTERNATIONAL CLOTHING INDUSTRIES LTD. VS. DY. CIT THAT OF THE INSTANT CASE. THE ADDITION MADE TO THE RETURNED INCOME, FOR WHICH THE PENALTY STOOD LEVIED, IS U/S.68. EXPLANATION, IF ANY, OFFER ED IN ESTABLISHING THE GENUINENESS OF THE CREDITS, IS ESSENTIALLY A MATTER OF FACT. THE ONLY EXPLANATION OFFERED BY THE ASSESSEE IN THE QUANTUM PROCEEDINGS, WHICH IS ITSELF A MATTER OF FA CT, WAS THAT THE SAID CREDITS IN FACT PERTAIN TO AN EARLIER YEAR, AND WHICH WAS FOUND ON VERIFICATION AS INCORRECT ON FACTS, SO THAT THE ADDITIONS STOOD CONFIRMED. IN THE PENALTY PROCEEDINGS, THE ASSESSEE HAS BEEN ABLE TO ADDUCE SOME EVIDENCES TOWARD ESTABLISHING THE CR EDITS AS REPRESENTING GENUINE LIABILITIES. OUR DECISION, EITHER ACCEPTING OR REJE CTING THE ASSESSEES CLAIM, IS AGAIN BASED ON APPRECIATION OF THOSE EVIDENCES, FORMING PART OF THE ASSESSEES EXPLANATION, AND FOR WHICH WE MAY REFER TO THE SERIES OF DECISIONS BY TH E APEX COURT, AS FOLLOWS, SO THAT WHAT IS RELEVANT IS WHETHER THE ASSESSEE HAS BEEN ABLE T O MAKE OUT A CASE OF A PLAUSIBLE AND BONA FIDE EXPLANATION TOWARD THE INCOME NOT RETURNED, THOUGH ASSESSABLE AND ASSESSED IN ITS HANDS. IN SUM, OUR DECISION IN THE INSTANT CASE IS BASED PURELY ON FINDINGS OF FACT; THE LAW IN THE MATTER BEING WELL SETTLED AND TRITE: CIT V. ATUL MOHAN BINDAL [2009] 317 ITR 1 (SC); UNION OF INDIA V. DHARMENDRA TEXTILE PROCESSORS [2008] 306 ITR 277 (SC); GULJAG INDUSTRIES V. CTO [2007] 293 ITR 584 (SC) ; K.P. MADHUSUDHANAN VS. CIT [2001] 251 ITR 99 (SC); B.A. BALASUBRAMANIAM AND BROS V. CIT (1999) 236 ITR 977 (SC); ADDL. CIT VS. JEEVAN LAL SHAH [1994] 205 ITR 244 (SC). 5. IN THE RESULT, THE ASSESSEES APPEAL IS PARTLY A LLOWED. 4 05 & '40 3 60 / 0 78 ORDER PRONOUNCED IN THE OPEN COURT ON AUGUST 02, 20 13 SD/- SD/- (B. R. MITTAL) (SANJAY ARORA) / JUDICIAL MEMBER '# / ACCOUNTANT MEMBER MUMBAI; 9& DATED : 02.08.2013 .&../ ROSHANI , SR. PS 9 ITA NO.3849/MUM/2011 (A.Y. 2003-04) INTERNATIONAL CLOTHING INDUSTRIES LTD. VS. DY. CIT '3 / ,0: ;':(0 '3 / ,0: ;':(0 '3 / ,0: ;':(0 '3 / ,0: ;':(0/ COPY OF THE ORDER FORWARDED TO : 1. )+ / THE APPELLANT 2. ,-)+ / THE RESPONDENT 3. < ( ) / THE CIT(A) 4. < / CIT - CONCERNED 5. :?@ ,0& , , / DR, ITAT, MUMBAI 6. @B' C / GUARD FILE '3& '3& '3& '3& / BY ORDER, D DD D/ // /7 7 7 7 (DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI