1997 (4) TMI 111

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....as not able to substantiate in the course of the assessment proceedings. The addition ultimately came to be confirmed by the Tribunal in the quantum proceedings and a copy of the order of the Tribunal has been placed on record. 3. Adverting to the assessment order it is seen that the assessee derives income from interest in respect of advances made to various members of the family as also on deposits with the companies, firms, etc. For advancing the aforesaid loans the assessee has borrowed funds from outsiders and which in the year under appeal aggregated Rs. 2,00,000 and odd from seven parties which included the amount in question. As per the observation in the assessment order no confirmation was filed during the course of the assessm....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....he address which was furnished was not correct, but this was rectified during the course of the assessment proceedings itself, but no further action was taken by the ITO by issuing summons under s. 131; and (iii) The penalty proceedings were quite separate and distinct from quantum proceedings and an addition in the latter did not necessarily mean a penalty under s. 271(1)(c). 6. In support of the aforesaid arguments and more so in support of the stand that no penalty under s. 271(1)(c) was leviable, the learned counsel placed reliance on various reported decisions, a list of which was furnished during the course of the hearing, more so, the following: (i) CIT vs. C.J. Rathnaswamy (1997) 140 CTR (Mad) 143 : (1997) 223 ITR 5 (Mad); ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... loans from outsiders in substantial quantities and passing these on to his family concerns and other members and inasmuch as the loans are obtained through brokers, he may or may not be in direct touch with the creditors. During the year under appeal loans aggregating Rs. 2,00,000 and odd have been received from seven parties and the addition has been made only in respect of one of them, the amount being Rs. 15,000. Even before the first appellate authority the Dy. CIT(A) in November, 1990 the assessee's counsel addressed a communication to the effect that another opportunity may be given for producing the creditor for necessary verification by the AO more so, when the earlier request made after giving the new address did not bring about a....