GNG Trading Company Pvt. Ltd., Delhi V. ACIT, Gurgaon

ITA 4963/DEL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 82177 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 01-10-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 26-08-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Difference of opinion
• Section: 14A; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH C , NEW DELHI) BEFORE SHRI GEORGE GEORGE K., JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO. 4963/DEL/2013 ASSESSMENT YEAR : 2008-09 GNG TRADING CO. PVT. LTD., VS. ACIT, CIRCLE 1, C/P KAPIL GOEL ADV., GURGAON A1/25, SECTOR 15, ROHINI, DELHI GIR / PAN:AAACG3367P (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI KAPIL GOEL, ADV. RESPONDENT BY : SHRI VIVEK NANGIA, SR. DR ORDER PER T.S. KAPOOR, AM: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD. CIT(A) DATED 21.06.2013. THE ASSESSEE HAS TAKEN VARIOUS G ROUNDS OF APPEAL WHICH ARE DESCRIPTIVE IN NATURE. HOWEVER, THE CRUX OF GR IEVANCE OF THE ASSESSEE IS THE ACTION OF LD. CIT(A) BY WHICH HE HAD CONFIRMED THE PENALTY U/S 271(1)(C) OF THE ACT. THE A.O. HAS IMPOSED PENALTY FOR TWO ADDITIONS; ONE OF WHICH RELATES TO ADDITION U/S 68 AMOUNTING TO RS .10 LACS AND THE OTHER RELATES TO ADDITION ON ACCOUNT OF DISALLOWANCE OUT OF EXPENSES AMOUNTING TO RS.5 LACS. THE ASSESSEE HAD NOT CONTESTED THE ADDI TIONS AND IN FACT HAD SURRENDERED FOR THESE ADDITIONS DURING ASSESSMENT P ROCEEDINGS. HOWEVER, DURING PENALTY PROCEEDINGS, THE ASSESSEE BEFORE LD. CIT(A) HAD PLEADED THAT IT HAD PROVIDED AND SUBMITTED COMPLETE PARTICULARS OF INCOME AND NO PARTICULARS WERE CONCEALED AND RELIANCE WAS PLACED ON A NUMBER OF CASE LAWS ITA NO.4963/DEL/2013 2 INCLUDING THE HONBLE APEX COURT DECISION IN THE CA SE OF RELIANCE PETRO PRODUCTS PVT. LTD. AS REPORTED IN 322 ITR 158. HOW EVER, THE LD. CIT(A) CONFIRMED THE ADDITION BY HOLDING AS UNDER: 3.3 I HAVE CONSIDERED THE FACTS OF THE CASE, THE P ENALTY ORDER U/S 271(1)(C) OF THE INCOME TAX ACT TOGETHER WITH APPEL LANT'S SUBMISSIONS AND VARIOUS JUDICIAL PRONOUNCEMENTS ON THIS ISSUE. AS PER SECTION 271(1)(C) OF THE INCOME TAX ACT, THE PENALTY IS IMP OSABLE IF THE AO IS SATISFIED THAT ANY PERSON HAS CONCEALED PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. IN THIS CASE, THE AO MADE AN ADDITION OF RS.L0,00,000/- SINCE THE APPELL ANT COULD NOT PROVE AUTHENTICITY OF UNSECURED LOANS OF RS.L0,00,000/- A ND COULD NOT PRODUCE VOUCHERS IN RESPECT OF EXPENSES TO THE TUNE OF RS.5,00,000/-. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE APP ELLANT SUBMITTED THAT HE HAD SUBMITTED NECESSARY CONFIRMATIONS, BANK STATEMENT AND JEWELLERY SALE BILL OF SMT. KIRAN DEVI AS SOURCE OF LOAN AT THE TIME OF ASSESSMENT PROCEEDINGS. IN ADDITION THE APPELLANT A LSO SUBMITTED THAT HE HAD PRODUCED DETAILS OF LABOUR CHARGES AND SHOWN VOUCHERS AND COMPLETE DETAILS OF EXPENSES INCURRED AND THUS NO E XPENSES WERE UN- VOUCHED. HOWEVER, THE AO AFTER CONSIDERING ALL THES E EVIDENCES CAME TO THE CONCLUSION THAT THE APPELLANT COULD NOT PROV E THE AUTHENTICITY OF UNSECURED LOAN OF RS.L0,00,000/- AND COULD NOT PROD UCE IN RESPECT OF EXPENSES OF RS.5,00,000/-/- RESULTING IN AN ADDITIO N OF RS.15,00,000/- TO THE RETURNED INCOME OF THE APPELLANT. IF, AS THE APPELLANT STATES, HE HAD CONFIRMATIONS, BANK STATEMENT AND OTHER SUPPORT S IN HIS POSSESSION WHICH WAS DISREGARDED BY THE AO, HE SHOU LD HAVE, INSTEAD OF SURRENDERING THE SAID AMOUNT CONTESTED THE ADDIT ION BEFORE THE APPELLATE AUTHORITIES. THE MERE FACT THAT THE APPEL LANT DECIDED TO SURRENDER THE AMOUNT OF RS.15,00,000/- ON ACCOUNT O F UNSECURED LOANS AND UN-VOUCHED EXPENSES, AND DID NOT APPEAL AGAINST THE SAID ADDITIONS GOES TO PROVE THAT HE HAD NO AUTHENTIC EV IDENCE TO SUBSTANTIATE UNSECURED LOANS AND EXPENSES AND HENCE THE ADDITION MADE BY THE AO WAS RIGHTLY MADE. THUS THE UN- AUTHE NTICATED, UNSECURED LOANS OF RS.L0,00,000/- AND UN-VOUCHED EX PENSES OF RS.5,00,000/- AMOUNTING IN ALL RS.15,00,000/- REPRE SENT THE CONCEALED INCOME OF THE APPELLANT IN RESPECT OF WHICH PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT WAS IMPOSED. ITA NO.4963/DEL/2013 3 3.4 THE APPELLANT HAS PLACED RELIANCE ON THE FOLLO WING JUDICIAL PRONOUNCEMENTS: - (I) CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD. 322 ITR 58 (SC) (2010). (II) UNION OF INDIA VS. DHARMENDER TEXTILE PROCESS OR (2008) 306 ITR 277 (SUPREME COURT). (III) SOBHAG TEXTILE PVT. LTD. VS. DEPARTMENT OF INCOME TAX 3.5 ON A PERUSAL OF THESE JUDICIAL PRONOUNCEMENTS I T IS OBSERVED THAT THE FACTS OF THE PRESENT CASE ARE ENTIRELY DIFFEREN T FROM THE FACTS OF CASES CITED. IN THE CASE OF RELIANCE PETRO PRODUCTS PVT. LTD. ( SUPRA), THE APPELLANT HAD SUBMITTED ALL DETAILS CONCERNING THE EXPENSES. IT WAS HELD THAT SINCE THE DETAILS SUBMITTED WERE CORR ECT AND NOT FOUND TO BE INACCURATE, HENCE A MERE CLAIM OF EXCESSIVE D EDUCTION WOULD NOT TANTAMOUNT TO FURNISHING OF INACCURATE PARTICULARS OR CONCEALMENT OF INCOME. IN THE CASE OF DHARMENDER TEXTILE PROCESSOR (SUPRA) ALL DETAILS GIVEN BY THE APPELLANT WERE CORRECT AND THE ADDITION MADE BY THE AO WAS SOLELY ON ACCOUNT OF DIFFERENT VIEWS TAK EN ON THE SAME SET OF FACTS BY THE APPELLANT ON THE ONE HAND AND THE D EPARTMENT ON THE OTHER. IN THAT CASE IT WAS CLAIMED THAT A MERE DIS ALLOWANCE OF THE CLAIM U/S 14A OF THE INCOME TAX ACT COULD NOT BE TH E BASIS OF LEVYING PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT. IN THE CASE OF SOBHAG TEXTILE LTD. VS. DEPARTMENT OF INCOME TAX (SUPRA), THE CONFIRMATION OF AMOUNT HAVING BEEN RECEIVED FROM THE DEPOSITORS ALONG WITH THEIR ADDRESS AND INCOME TAX PARTICULARS WERE DULY SUBMIT TED AT THE TIME OF ASSESSMENT PROCEEDINGS. HENCE, THE APPELLANT WAS AB LE TO PROVIDE COMPLETE DETAILS OF CREDITORS AS WELL AS EXPENSES R ESULTING IN A SHIFTING ON ONUS TO THE AD, WHICH HE FAILED TO DISCHARGE. IN SUCH A SCENARIO, THE IMPOSITION OF PENALTY ON THESE ISSUES WAS NOT C ALLED FOR. 3.6 IF WE ANALYZE THE FACTS OF THE AFORE-MENTIONED CASES AND AS WELL AS THE FACTS OF THE PRESENT CASE, WE FIND THAT WHER EAS IN THE CASES CITED COMPLETE DETAILS WERE PROVIDED BY THE APPELLANT AND THAT ADDITION WAS MADE IN SPITE OF GETTING ALL THE DETAILS OR ON THE BASIS OF MERE DISALLOWANCE MADE BY THE A.O., IN THE PRESENT CASE, THE APPELLANT ACCEPTED THE FACT THAT CASH CREDIT ENTRY OF RS.10,0 0,000/- ON ACCOUNT OF UNSECURED LOAN WAS NOT AUTHENTIC AND THAT EXPENS ES TO THE TUNE OF RS.5,00,000/- WERE UN-VOUCHED. IF WE ADD TO THIS, THE FACT THAT THE APPELLANT DID NOT CONTESTS THE SAID DECISIONS OF TH E A.O. BEFORE THE ITA NO.4963/DEL/2013 4 FIRST APPELLATE AUTHORITY, IT IS ABUNDANTLY CLEAR T HAT HE ACCEPTED THAT THE ADDITION OF RS.15,00,000/- WAS UNDISPUTED AND T HAT HE HAD UNDER- DECLARED HIS INCOME BY RS 15,00,000/-. HENCE AFTER A CAREFUL CONSIDERATION OF THE FACTS OF THE CASE, THE SUBMISS IONS OF THE APPELLANT TOGETHER W.ITH VARIOUS JUDICIAL PRONOUNCEMENTS, I H OLD THAT THE AO RIGHTLY IMPOSED THE PENALTY U/S 271(1)(C). THIS GRO UND OF APPEAL IS THUS DISMISSED. 2. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 3. AT THE OUTSET, LD. A.R. ARGUED THAT THE ASSESSEE HAD DISCLOSED COMPLETE FACTS REGARDING PARTICULARS OF INCOME AND NO PARTICULAR WAS CONCEALED. THE ADDITION WAS MADE BY RESORTING TO SECTION 68 FOR AN AMOUNT, WHICH THE ASSESSEE HAD CLAIMED AS UNSECURED LOAN WH ICH A.O. HAD REJECTED. IT WAS SUBMITTED THAT EVEN THE ADDITION ON ACCOUNT OF EXPENSES WAS MADE OUT OF THE EXPENSES ALREADY SUBMITTED ALONG WITH RETURN OF INCOME. LD. A.R. SUBMITTED THAT THE ASSESSEE HAD NOT FILED APPEAL TO BUY PEACE OF MIND. HOWEVER, THE PENALTY CANNOT BE UPHELD MERELY ON THE GROUND THAT THE ASSESSEE HAD NOT FILED APPEAL BEFORE LD. CIT(A). R EGARDING MERITS OF THE CASE, THE LD. A.R. SUBMITTED THAT THE ASSESSEE HAD RECEIVED UNSECURED LOANS FROM MS. KIRAN DEVI, WHO WAS MOTHER OF SHRI S K AGA RWAL, THE DIRECTOR OF THE ASSESSEE COMPANY. IT WAS SUBMITTED THAT MRS. K IRAN DEVI HAD SOLD ORNAMENTS AND IN SUPPORT OF SALE OF ORNAMENTS, LD. A.R. INVITED OUR ATTENTION TO PAPER BOOK PAGE 9 WHERE A COPY OF BIL L WAS PLACED. LD. A.R. ALSO INVITED OUR ATTENTION TO PAGES 7 & 8 WHERE A C OPY OF PASS BOOK EVIDENCING THE PAYMENT OF UNSECURED LOAN TO THE ASS ESSEE COMPANY WAS PLACED. LD. A.R. SUBMITTED THAT ALL THESE EVIDENCE S WERE SUBMITTED BEFORE THE AUTHORITIES BELOW BUT LD. CIT(A) UPHELD THE PEN ALTY. IN RESPECT OF EXPENSES, LD. A.R. SUBMITTED THAT ALL THE DETAILS W ERE THERE AND NO PARTICULARS WERE CONCEALED AND IT IS ONLY BECAUSE O F DIFFERENCE OF OPINION IN ITA NO.4963/DEL/2013 5 CERTAIN EXPENSES THAT THE A.O. DISALLOWED A PART OF THE SAME. THE LD. A.R. RELIED UPON A MUMBAI BENCH CASE DECIDED BY HONBLE TRIBUNAL IN THE CASE OF SH. DHANJI GALA IN I.T.A. NO. 2753 AND 2754 AND ARGUED THAT IN SIMILAR CIRCUMSTANCES FOR ADDITION U/S 68, THE MUMBAI BENCH HAD DELETED THE PENALTY. WITHOUT PREJUDICE TO THE ABOVE THE LD. A. R. SUBMITTED THAT LD. CIT(A) HAS WRONGLY CONFIRMED THE PENALTY IN THE ABS ENCE OF REQUISITE DISCERNIBLE OBJECTIVE SATISFACTION IN BODY OF ASSES SMENT ORDER AND RELIANCE WAS PLACED ON THE CASE LAW DECIDED BY HONBLE KARNA TAKA HIGH COURT IN THE CASE OF CIT VS MANJURATNA COTTON AND GINNING FACTOR Y 359 ITR 565. 4. LD. D.R. ON THE OTHER HAND SUBMITTED THAT THE AS SESSEE HAD NOT CONTESTED THE ADDITION WHICH IMPLIES THAT IT HAD CL EARLY FILED WRONG PARTICULARS OF INCOME AND IT WAS FURTHER SUBMITTED THAT DURING ASSESSMENT PROCEEDINGS, THE ASSESSEE HAD SURRENDERED FOR BOTH ADDITIONS, WHICH MEANS THAT ASSESSEE ITSELF HAD AGREED THAT THESE WERE CON CEALED INCOMES OF THE ASSESSEE. 5. WE HAVE HEARD RIVAL PARTIES AND HAVE GONE THROUG H THE MATERIAL PLACED ON RECORD. WE FIND THAT SECTION 271(1)(C) OF THE A CT HAS A DIRECT BEARING ON THE CONTROVERSY AND, THEREFORE, IT IS SALUTARY UPON US TO TAKE NOTE OF THE RELEVANT PROVISIONS OF SECTION 271 (1)( C) ALONG WI TH EXPLANATION 1 WHICH READ AS UNDER: '271. FAILURE TO FURNISH RETURNS, COMPLY WITH NOTIC ES, CONCEALMENT OF INCOME, ETC. (1). IF THE ASSESSING OFFICER OR THE COMMISSIONER ( APPEALS) OR THE CIT IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT, IS SATISFIED THAT ANY PERSON (A) AND (B)******** (C) HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. HE MAY DIRECT THAT SUCH PERSON SHALL PAY BY WAY OF PENALTY. ITA NO.4963/DEL/2013 6 (I) AND (INCOME-TAX OFFICER,)******** (III) IN THE CASES REFERRED TO IN CLAUSE (C) OR CLA USE (D), IN ADDITION TO TAX, IF ANY, PAYABLE BY HIM, A SUM WHICH SHALL NOT BE LESS THAN, BUT WHICH SHALL NOT EXCEED THREE TIMES, THE AMOUNT OF T AX SOUGHT TO BE EVADED BY REASON OF THE CONCEALMENT OF PARTICULARS OF HIS INCOME OR FRINGE BENEFIT THE FURNISHING OF INACCURATE PARTICU LARS OF SUCH INCOME OR FRINGE BENEFITS: EXPLANATION 1.- WHERE IN RESPECT OF ANY FACTS MATER IAL TO THE COMPUTATION OF THE TOTAL INCOME OF ANY PERSON UNDER THIS ACT, (A) SUCH PERSON FAILS TO OFFER AN EXPLANATION OR OFFERS AN E XPLANATION WHICH IS FOUND BY THE ASSESSING OFFICER OR THE COMMISSIONER( APPEALS) OR THE CIT TO BE FALSE, OR (B) SUCH PERSON OFFERS AN EXPLA NATION WHICH HE IS NOT ABLE TO SUBSTANTIATE AND FAILS TO PROVE THAT SU CH EXPLANATION IS BONA FIDE AND THAT ALL THE FACTS RELATING TO THE SA ME AND MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME HAVE BEEN DISCL OSED BY HIM, THEN, THE AMOUNT ADDED OR DISALLOWED IN COMPUTING THE TOT AL INCOME OF SUCH PERSON AS A RESULT THEREOF SHALL, FOR THE PURPOSES OF CLAUSE (C) OF THIS SUB-SECTION, BE DEEMED TO REPRESENT THE INCOME IN R ESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED'. A BARE PERUSAL OF THIS SECTION WOULD REVEAL THAT FO R VISITING ANY ASSESSEE WITH THE PENALTY, THE ASSESSING OFFICER OR THE LEARNED CIT(APPEALS) DURING THE COURSE OF ANY PROCEEDINGS B EFORE THEM SHOULD BE SATISFIED, THAT THE ASSESSEE HAS; (I) CON CEALED HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. AS FAR AS THE QUANTIFICATION OF THE PENALTY IS CONCERNED, THE PEN ALTY IMPOSED UNDER THIS SECTION CAN RANGE IN BETWEEN 100% TO 300% OF T HE TAX SOUGHT TO BE EVADED BY THE ASSESSEE, AS A RESULT OF SUCH CONC EALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS. THE OTHER MOS T IMPORTANT FEATURES OF THIS SECTION IS DEEMING PROVISIONS REGA RDING CONCEALMENT OF INCOME. THE SECTION NOT ONLY COVERS THE SITUATIO N IN WHICH THE ASSESSEE HAS CONCEALED THE INCOME OR FURNISHED INAC CURATE PARTICULARS, IN CERTAIN SITUATION, EVEN WITHOUT THE RE BEING ANYTHING TO INDICATE SO, STATUTORY DEEMING FICTION FOR CONCEALM ENT OF INCOME COMES INTO PLAY. THIS DEEMING FICTION, BY WAY OF EX PLANATION I TO SECTION 271 (1)( C) POSTULATES TWO SITUATIONS; (A) FIRST WHETHER IN RESPECT OF ANY FACTS MATERIAL TO THE COMPUTATION OF THE TOTAL INCOME UNDER THE PROVISIONS OF THE ACT, THE ASSESSEE FAILS TO OFFER AN EXPLANATION OR THE EXPLANATION OFFERED BY THE ASSES SEE IS FOUND TO BE FALSE BY THE ASSESSING OFFICER OR LEARNED CIT(APPEA LS); AND, (B) ITA NO.4963/DEL/2013 7 WHERE IN RESPECT OF ANY FACT, MATERIAL TO THE COMPU TATION OF TOTAL INCOME UNDER THE PROVISIONS OF THE ACT, THE ASSESSE E IS NOT ABLE TO SUBSTANTIATE THE EXPLANATION AND THE ASSESSEE FAILS TO PROVE THAT SUCH EXPLANATION IS BONA FIDE AND THAT THE ASSESSEE HAD DISCLOSED ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMP UTATION OF THE TOTAL INCOME. UNDER FIRST SITUATION, THE DEEMING FICTION WOULD COME TO PLAY IF THE ASSESSEE FAILED TO GIVE ANY EXPLANATION WITH RESPECT TO ANY FACT MATERIAL TO THE COMPUTATION OF TOTAL INCOME OR BY A CTION OF THE ASSESSING OFFICER OR THE LEARNED CIT(APPEALS) BY GI VING A CATEGORICAL FINDING TO THE EFFECT THAT EXPLANATION GIVEN BY THE ASSESSEE IS FALSE. IN THE SECOND SITUATION, THE DEEMING FICT ION WOULD COME TO PLAY BY THE FAILURE OF THE ASSESSEE TO SUBSTANTIATE HIS EXPLANATION IN RESPECT OF ANY FACT MATERIAL TO THE COMPUTATION OF TOTAL INCOME AND IN ADDITION TO THIS THE ASSESSEE IS NOT ABLE TO PROVE THAT SUCH EXPLANATION WAS GIVEN BONA FIDE AND ALL THE FACTS RELATING TO T HE SAME AND MATERIAL TO THE COMPUTATION OF THE TOTAL INCOME HAVE BEEN DI SCLOSED BY THE ASSESSEE. THESE TWO SITUATIONS PROVIDED IN EXPLANAT ION 1 APPENDED TO SECTION 271 (1)( C) MAKES IT CLEAR THAT THAT WHEN T HIS DEEMING FICTION COMES INTO PLAY IN THE ABOVE TWO SITUATIONS THEN TH E RELATED ADDITION OR DISALLOWANCE IN COMPUTING THE TOTAL INCOME OF TH E ASSESSEE, FOR THE PURPOSE OF SECTION 271(1)(C) WOULD BE DEEMED TO BE REPRESENTING THE INCOME IN RESPECT OF WHICH INACCURATE PARTICULARS H AVE BEEN FURNISHED. 6. IN THE LIGHT OF ABOVE EXPLANATION, LET US EXAMIN E THE FACTS OF THE PRESENT CASE. IN THE PRESENT CASE, THE ASSESSEE DU RING ASSESSMENT PROCEEDINGS, SURRENDERED AN AMOUNT OF RS.10 LACS, W HICH WAS CLAIMED TO HAVE BEEN RECEIVED AS UNSECURED LOAN FROM MRS. KIRA N DEVI AND FURTHER, DURING ASSESSMENT PROCEEDINGS THE ASSESSEE ALSO SUR RENDERED AN AMOUNT OF RS.5 LACS OUT OF UN-VOUCHED EXPENSES, THEREFORE, IN FACT, THE ASSESSEE HAD ACCEPTED THAT THESE AMOUNTS REPRESENT INCOMES OF AS SESSEE WHICH IT HAD NOT DECLARED AS INCOME IN THE RETURN OF INCOME FILED BY IT. THOUGH, DURING APPELLATE PROCEEDINGS BEFORE US, THE ASSESSEE HAS T RIED TO SUBSTANTIATE THESE UNSECURED LOANS AS RECEIVED BY IT FROM MOTHER OF DI RECTOR OF THE COMPANY ITA NO.4963/DEL/2013 8 CLAIMING TO HAVE SUFFICIENT SOURCES ON ACCOUNT OF S ALE OF SOME ORNAMENTS AND IN SUPPORT HE HAD ALSO INVITED OUR ATTENTION TO COPY OF PASS BOOK WHEREIN SUCH TRANSACTION WAS REFLECTED. HOWEVER, IT IS A F ACT THAT ASSESSEE ITSELF DURING ASSESSMENT PROCEEDINGS, HAD SURRENDERED THIS AMOUNT WHICH IMPLIES THAT IT WAS UNDISCLOSED INCOME OF THE ASSESSEE. TH EREFORE, IN THE PRESENT CASE, THOUGH THE ASSESSEE HAD TRIED TO JUSTIFY THE AMOUNT OF UNSECURED LOAN FROM MRS. KIRAN DEVI BUT WHEN CORNERED BY A.O., HAD SURRENDERED THE SAME. DURING PENALTY PROCEEDINGS BEFORE A.O. OR BEFORE LD . CIT(A) OR BEFORE US, THE LD. A.R. COULD NOT FURNISH ANY BONA FIDE EXPLAN ATION FOR OFFERING SURRENDER OF THE AMOUNTS EXCEPT TO BUY PEACE OF MIN D WHICH CANNOT BE SAID TO BE BONA FIDE EXPLANATION AS IT IS A GENERAL EXPL ANATION. THEREFORE, EXPLANATION (1) TO SECTION 271(1)(C) IS TRIGGERED. THE PROVISIONS OF SECTION 271(1)(C) NOT ONLY COVERS CASES OF ASSESSEE WHERE I NCOME IS CONCEALED BUT ALSO COVERS THOSE CASES WHERE THE ASSESSEE IS DEEME D TO HAVE CONCEALED THE PARTICULARS OF INCOME WHEN IT DOES NOT OFFER ANY EX PLANATION FOR ANY MATERIAL CONCERNING THE COMPUTATION OF INCOME OR THE EXPLANA TION FURNISHED BY ASSESSEE IS NOT BONA FIDE. THE ASSESSEE HAS ALSO NOT FURNISHED ANY EXPLANATION FOR UNVOUCHED EXPENSES FOR WHICH ADDITI ON OF RS.5 LACS WAS MADE OUT OF EXPENSES AND WHICH THE ASSESSEE HAD SUR RENDERED DURING ASSESSMENT PROCEEDINGS WHICH ITSELF IMPLIES THAT TH IS WAS ALSO AN UNDISCLOSED INCOME AS THE ASSESSEE HAS NOT FURNISHE D ANY BONA FIDE EXPLANATION AND IN FACT VOLUNTARILY AGREED FOR ADDI TION AS INCOME OF THE ASSESSEE. THE MUMBAI BENCH CASE LAW RELIED UPON BY LD. A.R. IN THE CASE OF SH. DHANJI GALA IS NOT APPLICABLE TO THE FACTS A ND CIRCUMSTANCES OF THE PRESENT APPEAL AS IN THAT CASE, THE UNSECURED LOAN WAS ARRANGED THROUGH BROKERS AND LENDER WAS NOT KNOWN TO THE ASSESSEE AN D MOREOVER LENDER WAS ITA NO.4963/DEL/2013 9 ASSESSED TO TAX AND ITS PARTICULARS WERE SUBMITTED TO A.O. THEREFORE, HONBLE TRIBUNAL HAD FOUND THE EXPLANATION GIVEN BY ASSESSEE TO BE BONA FIDE BUT IN THE PRESENT CASE, NO SUCH EXPLANATION H AS BEEN FURNISHED BY ASSESSEE AND LENDER IS MOTHER OF DIRECTOR OF ASSESS EE COMPANY AND NO BROKERS WERE INVOLVED. AS REGARDS RELIANCE PLACED BY LD. A.R. ON THE CASE LAW OF HONBLE KARNATAKA HIGH COURT, WE FIND THAT Q UESTIONS RAISED AND ANSWERED IN THAT CASE HAVE NOT BEEN CONTESTED IN TH IS APPEAL. THE ASSESSEE HAS TAKEN GROUND NO.3 IN ITS APPEAL TO RAISE THE IS SUE THAT NECESSARY OBJECTIVE SATISFACTION WAS NOT RECORDED IN THE BODY OF ASSESSMENT ORDER. HOWEVER WE FIND THAT SAME HAS BEEN RECORDED IN ASSE SSMENT ORDER AND MOREOVER, LD. A.R. HAS NOT ARGUED IT. LD. CIT(A) H AS PASSED A VERY ELABORATE AND WELL REASONED SPEAKING ORDER WHEREIN WE DO NOT FIND ANY INFIRMITY. 7. IN VIEW OF THE ABOVE, APPEAL FILED BY THE ASSESS EE IS DISMISSED. 8. ORDER PRONOUNCED IN THE OPEN COURT ON 05 TH DEC., 2014. SD./- SD./- (GEORGE GEORGE K.) (T.S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 05 TH DEC., 2014 SP COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). ITA NO.4963/DEL/2013 10 S.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON SR. PS/PS 2 DRAFT PLACED B EFORE AUTHOR SR. PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/AM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR. PS/PS 6 KEPT FOR PRONOUNCEMENT SR. PS/PS 7 FILE SENT TO BENCH CLERK SR. PS/PS 8 DATE ON WHICH THE FILE GOES TO HEAD CLERK 9 DATE ON WHICH FILE GOES TO A.R. 10 DATE OF DISPATCH OF ORDER