Shri Iqbal N.Pipadwala, Ahmedabad V. The Income tax Officer,Ward-3(4), Ahmedabad

ITA 405/AHD/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60198 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-04-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 13-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAHUL KUMAR
• Assessee Lawyers: S N DIVATIA
• Keywords: Unexplained cash credit; Gift; Reasonable cause; Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'A' BEFORE SHRI D K TYAGI JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI ACCOUNTANT MEMBER ITA NO.405/AHD/2012 (ASSESSMENT YEAR:-2007-08) IQBAL N PIPADWALA, PROP. M/S ALMO DYES TEX, 4010, PIPADWALA HOUSE, NR. VASANT RAJAB CHOWK, JAMALPUR, AHMEDABAD V/S THE INCOME-TAX OFFICER, WARD-3(4), AHMEDABAD PAN: AAXPP 3394 D [APPELLANT] [RESPONDENT] ASSESSEE BY :- SHRI S N DIVATIA, AR REVENUE BY:- SHRI RAHUL KUMAR, SR. DR DATE OF HEARING:- 11-04-2012 DATE OF PRONOUNCEMENT:- 11-04-2012 O R D E R PER D K TYAGI (JM) :- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST AN ORDER DATED 02-12-2011 PASSED B Y THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-6, [HEREINAFTE R REFERRED TO AS THE LEARNED CIT(A)] AHMEDABAD FOR ASSESSMENT Y EAR (AY) 2007-08, WHEREBY THE LEARNED CIT(A) HAS CONFIRMED T HE PENALTY OF RS.52,020/- LEVIED U/S 271(1)(C) OF THE INCOME-T AX ACT, 1961 [HEREINAFTER REFERRED TO AS THE ACT]. 2 THE BRIEF FACTS OF THE CASE AS PER PENALTY ORDER ARE AS UNDER:- 2 2 IN THIS CASE RETURN OF INCOME WAS FILED ON 19/10/2 007 DECLARING TOTAL INCOME AT RS.3,95,424/-. THE ASSESSMENT U/S.143(3) OF THE I.T. ACT WAS COMPLETED ON 18/12/2009 DETERMINING TOTAL INCOM E AT RS.5,91,700/-. ADDITION OF RS.80,000/- WAS MADE ON ACCOUNT OF ADDITION TO PROPRIETOR'S CAPITAL ACCOUNT. FURTHER, ADDITION OF RS.90,000/- WAS MADE BEING UNEXPLAINED CASH CREDIT U/S.68 OF THE I.T. ACT, 1961. CONSIDERING THE FACTS OF THE CASE PENALT Y PROCEEDINGS U/S. 271(1)(C) WERE INITIATED IN RESPECT OF ABOVE ADDITI ONS. FACTS OF THE ADDITION TO PROPRIETOR'S CAPITAL ACCOUNT 2 VERIFICATION OF PROPRIETORS CAPITAL ACCOUNT REVEA LS THAT THE PROPRIETOR HAS MADE ADDITION OF RS.30,000/- IN CASH IN HIS CAPITAL ACCOUNT DURING THE F.Y.2006-07. IN ORDER TO VERIFY GENUINENESS OF SUCH ADDITION, THE ASSESSEE WAS ASKED TO JUSTIFY TH E SOURCE OF SAME. IN RESPONSE TO THAT THE ASSESSEE HAS SUBMITTED THAT AS SESSEE'S FATHER HAS GIVEN GIFT OF RS.80,000/- IN CASH TO THE ASSESSEE B EFORE HIS DEATH. FURTHER, THE ASSESSEE HAS ALSO CLAIMED THAT HIS FAT HER WAS LIVING WITH HIM. ON GOING THROUGH THE SUBMISSION OF THE ASSESSEE IT WAS FOUND THAT ASSESSEE HAD SIMPLY TAKEN PLEA THAT CASH AMOUNT WAS RECEIVED FROM HIS FATHER AS GIFT. HOWEVER, NO DOCUMENTARY EVIDENC E / PROOF WAS FURNISHED EITHER IN FORM OF 'GIFT DEED OR OTHER EVI DENCES TO PROVE THE GENUINENESS OF SOURCE OF CASH INTRODUCED IN PROPRIE TOR'S CAPITAL ACCOUNT. FURTHER THE ASSESSEE ALSO FAILED TO PROVE THAT THE GIFT WAS ACTUALLY RECEIVED IN CASH FROM HIS FATHER. THE PATT ERN OF GIFT RECEIVED BY THE ASSESSEE SHOWN IN THE PROPRIETOR'S CAPITAL A CCOUNT WAS ALSO NOT APPEARS BE GENUINE. THE ASSESSEE HAS CLAIMED TO HAV E RECEIVED GIFT OF RS,80,000/- IN THREE INSTALLMENTS WITHIN A SHORT SP AN OF ABOUT ONE AND HALF MONTH. FURTHER NO DOCUMENTARY EVIDENCE WAS FUR NISHED BY THE ASSESSEE TO PROVE THAT ASSESSEE'S FATHER ACTUALLY P OSSESS THE CASH AMOUNT TO PASS ON TO THE ASSESSEE IN FORM OF CASH G IFT. IN VIEW OF THESE FACTS THE AMOUNT OF RS.80,000/- WAS ADDED BEING, UN EXPLAINED CASH CREDIT U/S.68 OF THE I.T. ACT, 1961. 3 UNSECURED LOAN: DURING THE COURSE OF ASSESSMENT, IT HAS NOTICED THA T DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAS CLAIMED TO HAV E RECEIVED CASH 3 3 LOAN OF RS.90,000/- FROM 5 DIFFERENT PERSONS. THE L OAN AMOUNT WAS RANGING FROM RS.16,500/- TO RS.19,000/- IN EACH CAS E. IN ORDER; TO VERIFY GENUINENESS OF LOAN TRANSACTIONS, THE ASSESS EE WAS ASKED TO FURNISH DETAILS OF PERSONS FROM WHOM LOAN WAS CLAIM ED TO HAVE BEEN- OBTAINED. FURTHER, THE ASSESSEE WAS REQUIRED TO FUR NISH RELEVANT DOCUMENTARY EVIDENCES TO PROVE IDENTITY OF THE DEPO SITOR, GENUINENESS OF TRANSACTION AND CREDIT WORTHINESS OF THE DEPOSIT ORS. IN RESPONSE TO THE ABOVE QUERY, THE ASSESSEE HAD FI LED HIS REPLY IN A VERY CASUAL MANNER. THE ASSESSEE VIDE REPLY, DATED 18.12.2009 HAD CLAIMED THAT 'WE HAVE RECEIVED UNSECURED LOANS. OFF ICER WANTS SOME CLARIFICATION OF 5 PERSONS, WHO HAVE GIVEN UNSECURE D LOANS TO THE ASSESSEE. AMOUNT OF THE UNSECURED LOAN IS LESS THAN RS.20,000/- WE SHOULD NOT GIVE ANY DETAILS OF THOSE 5 PERSONS, REC EIVE AS UNSECURED LOAN.' 4 FROM THE ABOVE SUBMISSION IT WAS CLEAR THAT THE A SSESSEE HAD NOT GIVEN ANY INFORMATION / DETAIL IN RESPECT OF DE POSITORS WHO HAS GIVEN CASH LOAN OF RS.90,000/-. FURTHER, THE ASSESS EE FAILED TO FURNISH COMPLETE ADDRESS OF THE DEPOSITOR AS WELL AS PAN AN D CONFIRMATION. IN VIEW OF ABOVE FACTS THE LOAN AMOUNT OF RS.90000/- C REDITED IN ASSESSEE'S BOOKS OF ACCOUNTS WAS TREATED AS NOT GEN UINE AND BOGUS AND ADDITION OF RS.90,000/- WAS MADE BEING UNEXPLAINED CASH CREDIT U/S.68 OF THE I.T, ACT, 1961. LOOKING TO THE FACTS OF THE CASE, PENALTY PROCEEDIN GS U/S. 271(1)(C) WERE INITIATED FOR FURNISHING INACCURATE PARTICULAR S OF INCOME AND FOR CONCEALING PARTICULARS OF INCOME. NOTICE U/S.274 R. W.S. 271(L)(C) WAS ISSUED ON 18/12/2009 AND WAS DULY SERVED UPON THE A SSESSEE THROUGH SPEED POST AD. 5 IN RESPONSE TO ABOVE NOTICE, THE ASSESSEE HAS SUB MITTED REPLY ON 07/01/10. IN THE SAID REPLY ASSESSEE HAS SIMPLY MAD E A REQUEST TO DROP THE PENALTY PROCEEDINGS. THEREFORE, ANOTHER OPPORTU NITY WAS PROVIDED VIDE NOTICE DATED 14/05/2010 WITH A REQUEST TO THE ASSESSEE TO FURNISH REPLY ON THE MERIT OF THE ISSUES. 6 IN RESPONSE TO ABOVE THE ASSESSEE HAS FILED REPLY ON 24/5/2010. IN RESPECT TO THE ADDITION ON ACCOUNT OF CASH INTRO DUCTION IN PROPRIETOR'S CAPITAL ACCOUNT THE ASSESSEE HAS SUBMI TTED HIS REPLY1 AS UNDER:- 4 4 2) EXPLANATION REGARDING GIFT INCOME 'ASSESSEE HAS RECEIVED GIFT DURING THE YEAR FROM HI S FATHER. THERE WAS DISPUTE GOING ON IN THE FAMILY O F ASSESSEE, AND DUE TO WHICH FATHER HAS GIVEN SAID SU M WHICH WAS NOT KNOWN TO OTHER MEMBERS OF FAMILY. DUE TO FAMILY DISPUTE, ASSESSEE WAS NOT IN POSITION TO PRE PARE GIFT DEED OR ANY OTHER DOCUMENTS. OVERALL THE DISPU TE WAS SO SERIOUS IN THE FAMILY OF ASSESSEE THAT THE ASSES SEE WAS NOT IN A POSITION TO PROVE REASONABLE GROUNDS OF AB OVE FACTS.' 7 I HAVE GONE THROUGH THE SUBMISSION FILED BY THE A SSESSEE. THE ASSESSEE'S CONTENTION REGARDING CASH RECEIVED -BY W AY OF GIFT FROM HIS FATHER AND SUBSEQUENT EVENT OF FAMILY DISPUTES ARE IMAGINARY AND WITHOUT ANY SUPPORTING EVIDENCE. FURTHER, ASSESSSEE 'S CONTENTION THAT HE COULD NOT ABLE TO PROVE THE FACTS IN RESPECT OF GIFT CLAIMED TO BE RECEIVED IN CASH IS ALSO NOT APPEARS TO BE GENUINE. IN VIEW ABOVE FACTS THE ASSESSEE'S CONTENTION IS NOT FOUND TRUE AND THE REFORE NOT ACCEPTABLE. IN RESPECT OF ADDITION OF RS.90,000/- ON ACCOUNT OF UNSECURED LOAN. THE ASSESSEE HAS SUBMITTED AS UNDER:- 1) EXPLANATION REGARDING FOR THE UNSECURED LOAN 'ASSESSEE HAS RECEIVED UNSECURED LOAN FROM 5 DIFFER ENCE PARTIES, OF AMT BELOW RS.20,000/-. SAME LOAN WAS ACCOUNTED AND RECEIVED FROM RELATIVES OF ACCOUNTANT ON THAT BASIS IT IS DIFFICULT TO DERIVE CONFIRMATION O F ALL FIVE PARTIES AS ACCOUNTANT HAS ALREADY LEFT THE JOB IN F .Y. 07- 08. ALL THE ABOVE MATTER ABOUT ACCEPTING LOAN WAS N OT KNOWN TO ASSESSEE AND WAS HANDLED BY ACCOUNTANT ONL Y. ON THE BASIS OF ABOVE FACTS IT, IS PROVED, THAT THE RE IS REASONABLE CAUSE FOR NOT SUBMITTING THE CONFIRMATIO N OF PARTIES.' I HAVE GONE THROUGH THE SUBMISSION FILED BY THE ASS ESSEE. THE ASSESSEE'S CONTENTION IS VERY CAUSAL AND WITHOUT AN Y EVIDENCE. THE ASSESSEE CLAIMED THAT HE WAS NOT AWARE OF THE LOAN TRANSACTION AS THE SAME WERE THROUGH HIS ACCOUNTANT IS NOT SUFFICIENT TO PROVE THE GENUINENESS OF LOAN TRANSACTION, EVEN THE ASSESSEE DOES NOT AWARE 5 5 ABOUT THE IDENTITY OF THE DEPOSITORS AS WELL AS ADD RESS OF THE SAME IS NOT FOUND ACCEPTABLE. IN VIEW OF THESE FACTS THE AS SESSEES CONTENTION IS NOT ACCEPTABLE AND HENCE REJECTED. 8 HERE IT IS IMPORTANT TO MENTION THAT THE ASSESSEE HAD NOT PREFERRED APPEAL AGAINST THE ADDITION MADE IN THE A SSESSMENT ORDER. THEREFORE IT CAN BE EASILY PRESUMED THAT THE ADDITI ONS MADE IN THE COURSE OF ASSESSMENT PROCEEDINGS WERE ACCEPTABLE TO THE ASSESSEE. IN VIEW OF ABOVE FACTS IT IS CLEAR THAT ASSESSEE HAS N OT FURNISHED FULL AND TRUE PARTICULARS OF HIS INCOME AS WELL AS CONCEALED PARTICULARS OF INCOME SO FAR AS ABOVE STATED ADDITIONS ARE CONCERN ED. THEREFORE, THE ASSESSEE IS LIABLE FOR LEVY OF PENALTY U/S. 271(1)( C) OF THE IT. ACT, 1961. RELIANCE IN THIS RESPECT IS PLACED ON THE FOLLOWING DECISIONS: I) A.M. SHAH) & CO. V. CIT 238 ITR 415 (GUJ) - WHER EBY THE HON'BLE HIGH COURT HELD THAT 'THE WORD 'INACCURATE PARTICULARS' WOULD COVER BOTH FALSITY IN FINAL FIGURE AS ALSO CONSTITU ENT ELEMENTS, WHICH ARE INACCURATE IN SOME SPECIFIC OR DEFINITE RESPECT , WHETHER IN CONSTITUENT OR SUBORDINATE ITEMS OF INCOME OR END R ESULT. THEREFORE, ANY CONCEALMENT OR INACCURACY IN PARTICULARS OF INC OME IN RETURN OCCURRING AT ANY STAGE UP TO AND INCLUSIVE OF ULTIM ATE STAGE OR WORKING OUT OF TOTAL INCOME WOULD ATTRACT PENALTY PROVISIO NS OF SECTION 271(1)(C).' II) CIT V/S. GATES FOAM AND RUBBER COMPANY 91 ITR 4 67 (KER) WHEREIN THE HON'BLE HIGH .COURT HELD THAT - 'THE AS SESSEE'WAS SHOWING SHARE INCOME FROM FIRM. THE FINDING WAS THA T THE FIRM WAS NOT GENUINE; ACCOUNTS TO FURNISHING OF INACCURATE P ARTICULARS IMPOSITION OF PENALTY WAS VALID.' VARIOUS COURTS HAVE HELD THAT IT IS THE ONUS OF THE ASSESSEE TO PROVE THAT THERE WAS NO INTENTIONAL CONCEALMENT FURTHER, THE COURTS HAVE ALSO GONE TO THE EXTENT OF HOLDING THAT U/S 271(1)(C) TH E REVENUE NEED NOT TO PROVE THE ELEMENT OF MENS-REA. RELIANCE IN THIS RES PECT IS PLACED OH THE FOLLOWING JUDGMENT. I) ADDL. CIT V. JEEVAN LAL SHAH 205 ITR 244 (SC) II) CIT V.' N. NANDKUMAR, AJI INDUSTRIES 279 JTR 80 (KER). III) ADDL. CIT'V. BIHAR STATE CO-OP MKTG. UNION LTD . 163 ITR 450 (PATNA) 6 6 IV) ADDL. CIT V. RAMPRAKASH 128 ITR 559 (ALL) FURTHER IT IS SETTLED LEGAL PRINCIPLE THAT IT IS NO T NECESSARY TO PROVE MENS-REA BEFORE LEVY OF PENALTY U/S 271(1)(C) OF TH E ACT SINCE THE PENALTY UNDER THE SAID SECTION IS A CIVIL LIABILITY . RELIANCE IN THIS RESPECT IS PLACED ON THE DECISION OF THE HON'BLE SC IN THE CASE OF UOI &. ORS. VS. DHARAMENDRA TEXTILE PRO CESSOR &. ORS. REPORTED IN 306 ITR 277, WHEREIN THE HON'BLE SC HAS HELD AS UNDER. 'THE EXPLANATIONS APPENDED TO S. 271(1)(C) OF THE I T ACT ENTIRELY INDICATES THE ELEMENT OF STRICT LIABILITY ON THE AS SESSEE FOR CONCEALMENT OR FIR GIVING INACCURATE PARTICULARS WHILE FILING R ETURN THE JUDGMENT IN DILIP N SHROFFS CASE (SUPRA) HAS NOT CONSIDERED THE EFFECT AND RELEVANCE OF S. 276C OF THE N ACT. OBJECT BEHIND EN ACTMENT OF S. 271(1)(C) R/W EXPLANATIONS INDICATE THAT THE -SAID SECTION HAS BEEN ENACTED TO PROVIDE A REMEDY FOR LOSS OF REVENUE. TH E PENALTY UNDER THAT PROVISION IS A CIVIL LIABILITY. WILLFUL CONCEA LMENT IS NOT AN ESSENTIAL INGREDIENT FOR ATTRACTING CIVIL LIABILITY AS IN CASE IN THE MATTER OF PROSECUTION UNDER S. 276C OF THE ACT.' 9 IN VIEW OF ABOVE I AM OF THE 'OPINION THAT THIS I S A FIT CASE FOR LEVY OF PENALTY U/S.271(1)(C) OF, THE IT ACT, 1961 IN RESPECT OF ADDITION OF RS.1,70,000/- BEING CASH INTRODUCTION IN PROPRIE TOR'S CAPITAL ACCOUNT AND UNSECURED LOAN RECEIVED DURING THE YEAR UNDER C ONSIDERATION. 10 LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CA SE AS DISCUSSED ABOVE A MINIMUM' PENALTY @100% OF THE AMOUNT OF TAX SOUGHT TO BE EVADED BY REASON OF SUCH CONCEALING PARTICULARS OF INCOME COMES TO RS.52,020/- OF TAX AND MAXIMUM PENALTY @ 300% OF RS .1,56,060/- OF TAX ON CONCEALED INCOME. 11IN VIEW OF THE ABOVE FACTS I LEVY THE MINIMUM PEN ALTY OF RS.52,020/- U/S.271(1)(C) OF THE I. T. ACT. 3 AGGRIEVED BY THIS ORDER PASSED BY THE AO, THE ASS ESSEE WENT IN APPEAL BEFORE THE LEARNED CIT(A) AND SUBMIT TED THE FOLLOWING DETAILED SUBMISSIONS:- 7 7 A) FIRSTLY, THE EXPLANATION OFFERED BY THE APPELLA NT AS TO THE GIFT OF RS.80,000 FROM HIS FATHER WHICH WAS THE SOURCE OF CAPITAL INTRODUCED IN HIS PROPRIETARY BUSINESS REJECTED BY AO SIMPLY O N THE GROUND OF FAILURE TO PRODUCE DOCUMENTARY EVIDENCE IN RELATIO N TO THE GIFT. HOWEVER, THE EXPLANATION OFFERED BY THE APPELLANT H AS NOT BEEN FOUND TO BE UNTRUE OR FALSE. IT IS NATURAL AND NORMAL CON DUCT OF ANY PARENT TO GIVE GIFT TO THE SON OR HIS CHILD. UNFORTUNATELY, T HE APPELLANT'S FATHER HAD ALREADY EXPIRED SO THAT HIS CONFIRMATION COULD NOT BE PRODUCED, BUT THE CONFIRMATION OF APPELLANT SISTER IS FILED H EREWITH. THE AO HAS ALSO FAILED TO APPRECIATE THAT THE APPELLANT'S FATH ER ALSO CARRYING ON BUSINESS IN CHEMICALS. B) SECONDLY, AS REGARDS THE UNSECURED LOAN THE APPE LLANT HAD EXPLAINED THAT THE AMOUNTS WERE RECEIVED BY WAY OF LOAN/DEPOSITS FROM FIVE PARTIES THROUGH ACCOUNTANT, BUT THIS EXPL ANATION WAS NOT ACCEPTED BY AO SIMPLY ON THE Y GROUND OF FAILURE TO FURNISH EVIDENCE RELATING TO IDENTITY AND ADDRESS OF THE / PARTIES. THE APPELLANT SUBMITS THAT 'HE WAS NOT AWARE ABOUT THE PARTIES NOR THEIR NAMES AND ADDRESSES OR OTHER DETAILS BECAUSE THE SAME WERE PROCURED THR OUGH THE GROUP ACCOUNTANT SHRI GANPATBHAI WHO HAD LEFT THE SERVICE AND HIS WHEREABOUTS WERE NOT TRACEABLE INSPITE OF ALL POSSI BLE EFFORTS. THE APPELLANT COULD NOT FURNISH CONFIRMATION FROM THE S AID ACCOUNTANT OR THE DEPOSITORS UNDER SUCH CIRCUMSTANCES, BUT THE CO PY OF SALARY ACCOUNT FROM BOOKS OF ASSOCIATE CONCERN IS FILED HE REWITH IN THIS REGARD. C) THIRDLY, THE APPELLANT SUBMITS THAT SIMPLY BECAU SE THE EXPLANATION FURNISHED BY THE APPELLANT HAS BEEN REJ ECTED BY AO, NO PENALTY U/S. 271(1)(C) COULD BE IMPOSED. IN OTHER W ORDS MERE REJECTION OF THE EXPLANATION OR ADDITION TOWARDS CASH CREDIT WILL NOT AUTOMATICALLY ATTRACT THE PENALTY REFERRED TO NOKIA INDIA P. LTD. (124 TTJ 145 (DEL). SIMILARLY IN CASE OF RELIANCE PETRO PRODUCTS PVT. LTD. (322 ITR 158 (SC) IT WAS HELD THAT METE INCORRECT C LAIM DOES NOT AMOUNT TO FURNISHING THE INACCURATE PARTICULARS OF INCOME. EVEN IN CASE OF NIRMA COMMERCIAL (308 ITR 406) IT WAS HELD THAT ADDITION OF CASH CREDIT FOR FAILURE TO PRODUCE DEPOSITORS WOULD NOT ATTRACT PENALTY. SIMILARLY IN CASE OF NATIONAL TEXTILES (253 ITR ) ( GUJ) IT WAS HELD THAT NO PENALTY FOR CONCEALMENT COULD BE LEVIED IN RESPE CT OF ADDITION MADE TOWARDS CASH CREDIT UNLESS THE SAME HAVE BEEN PROVED TO BE FALSE.' 8 8 AFTER TAKING INTO CONSIDERATION THE SUBMISSIONS MAD E BY THE ASSESSEE, THE LEARNED CIT(A) CONFIRMED THE PENALTY IMPOSED BY THE AO WITH THE FOLLOWING OBSERVATIONS:- 2.3 I HAVE CONSIDERED THE FACTS OF THE CASE; PENAL TY ORDER AND APPELLANT'S WRITTEN SUBMISSION. ASSESSING OFFICER L EVIED PENALTY ON TWO ADDITIONS- UNEXPLAINED CASH INTRODUCED AND CLAIMED TO BE RECEIVED FROM FATHER AS GIFT AND UNEXPLAINED CASH LOANS. IT IS NOT IN DISPUTE THAT APPELLANT WAS NOT ABLE TO EXPLAIN WITH NECESSARY EV IDENCE AND DETAILS THE SOURCE AND GENUINENESS OF THESE CREDITS. THE ON US TO PROVE THE GENUINENESS, IDENTITY AND CREDIT WORTHINESS IS OF T HE APPELLANT. APPELLANT DID NOT DISCHARGE ITS ONUS. THE ADDITIONS WERE MADE BECAUSE APPELLANT WAS NOT ABLE TO EXPLAIN THE NATUR E AND SOURCE OF CASH DEPOSITS. SINCE APPELLANT WAS NOT ABLE TO OFFE R ANY EXPLANATION WITH REGARD TO THESE CREDITS APPEARING IN HIS BOOKS , THE ADDITIONS MADE BY THE OFFICER ARE DEEMED CONCEALMENT WITHIN THE EX PLANATION TO SECTION 271(1)(C) OF IT ACT. THE ASSESSING OFFICER DEALT WITH BOTH THE ADDITIONS ON FACTS AND ALSO DISCUSSED RELEVANT JUDI CIAL DECISIONS IN SUPPORT OF THE PENALTY. AS AGAINST THIS, APPELLANT DID NOT SUBMIT ANY EVIDENCE TO PROVE HIS BONAFIDE. CONSIDERING THE FAC TS NARRATED IN THE PENALTY ORDER, THE PENALTY LEVIED BY THE AO IS CONF IRMED. 4 FURTHER AGGRIEVED, NOW THE ASSESSEE IS IN APPEAL BEFORE US. AT THE TIME OF HEARING, THE LEARNED COUNSEL OF THE ASSESSEE PLACED RELIANCE ON THE WRITTEN SUBMISSIONS FILED BY THE AS SESSEE BEFORE THE LEARNED CIT(A) WHICH WE HAVE ALREADY REPRODUCED IN PARA 3 ABOVE. THE LEARNED DR, ON THE OTHER HAND, SUPPORTE D THE ORDER OF THE AUTHORITIES BELOW. 5 WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RE CORD AND WE FIND THAT AS FAR AS THE EXPLANATION OFFERED BY T HE ASSESSEE WITH REGARD TO THE GIFT OF RS.80,000/- FROM HIS FATHER W HICH WAS THE SOURCE OF CAPITAL INTRODUCED IN HIS PROPRIETARY BUS INESS, IS CONCERNED, WE FIND THAT THE ASSESSEE COULD NOT FILE THE 9 9 CONFIRMATION FROM HIS FATHER AS HE HAD ALREADY EXPI RED BUT THE CONFIRMATION OF ASSESSEES SISTER WAS FILED IN SUPP ORT OF HIS CLAIM. UNDER THESE CIRCUMSTANCES, IT CANNOT BE SAID THAT THE EXPLANATION OFFERED BY THE ASSESSEE WAS NOT BONA FI DE. NO MATERIAL HAS BEEN BROUGHT ON RECORD BY THE AO TO DO UBT THE BONAFIDENESS OF THIS EXPLANATION. THEREFORE, EXPLAN ATION 1 TO SECTION 271(1)(C) IS NOT APPLICABLE TO THE FACTS OF THIS CASE AND THEREFORE IT IS NOT A FIT CASE WHERE PENALTY FOR CO NCEALMENT CAN BE LEVIED THOUGH THE ADDITION HAS BEEN MADE. THEREFORE , AS FAR AS THE PENALTY IN RESPECT OF ADDITION ON ACCOUNT OF GI FT FROM FATHER IS CONCERNED, THE PENALTY IMPOSED BY THE AO AND SUS TAINED BY THE LEARNED CIT(A) IS HEREBY DELETED. 6 NOW COMING TO THE UNSECURED LOANS OF RS.90,000/- RECEIVED BY THE ASSESSEE FROM FIVE PARTIES, SIMPLY BECAUSE T HE EXPLANATION OF THE ASSESSEE WAS NOT ACCEPTABLE TO THE AO, PENAL TY FOR CONCEALMENT U/S 271(1)(C) OF THE ACT CANNOT BE LEVI ED. MERE ADDITION DUE TO CASH CREDITS WILL NOT AUTOMATICALLY ATTRACT THE PENAL PROVISIONS OF SECTION 271(1)(C) OF THE ACT. U NLESS THE EXPLANATION OFFERED BY THE ASSESSEE IS PROVED TO BE FALSE OR NOT BONA FIDE BY THE AO, PENALTY CANNOT BE LEVIED. SINC E THE SAME HAS NOT BEEN DONE IN THIS CASE, PENALTY WAS NOT LEV IABLE. 7 IN VIEW OF ABOVE, PENALTY OF RS.52,020/- LEVIED U /S 271(1)(C) OF THE ACT BY THE AO AND SUSTAINED BY THE LEARNED CIT(A), IS HEREBY DELETED. 10 10 7 IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE COURT TODAY ON 11-04-2012 SD/- SD/- (ANIL CHATURVEDI) ACCOUNTANT MEMBER (D K TYAGI) JUDICIAL MEMBER DATE : 11-04-2012 COPY OF THE ORDER FORWARDED TO: 1. IQBAL N PIPADWALA, PROP. M/S ALMO DYES TEX, 4010 , PIPADWALA HOUSE, NR. VASANT RAJAB CHOWK, JAMALPUR, AHMEDABAD 2. THE INCOME-TAX OFFICER, WARD-3(4), AHMEDABAD 3. CIT CONCERNED 4. CIT(A)-VI, AHMEDABAD 5. DR, ITAT, AHMEDABAD BENCH-A, AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT, AHMEDABAD