TaxTMI 
TaxTMI 
2005 (10) TMI 269
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....lding that assessee has discharged its onus of proving the cash credits of Rs. 2,80,000. 3. On the facts and in the circumstances of the case, the learned CIT(A) erred in observing that names, addresses and confirmations in respect of loans were furnished by the assessee." 3. Though the Revenue has raised three grounds of appeal, the main dispute relates to the deletion of the addition of Rs. 2,80,000 made by the AO on account of unexplained loans. 4. The brief facts leading to the dispute are that the Tribunal, Nagpur Bench in its order in ITA No. 25/Nag/2001 dt. 28th Feb., 2003 while considering this issue set aside the order of the learned CIT(A) and remanded the matter back to the file of the AO so as to offer an opportunity to the assessee to explain the credits in question in respect of the following 12 unsecured loans: Rs. 1. Shri Satyanarayan Jhanwar 50,000 2. Mrs. Seema Khan 50,000 3. Mr. Rajeshwar Prasad 40,000 4. Mr.....
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....er of the AO, the assessee filed appeal before the learned CIT(A). 5. Before the learned CIT(A) , the assessee made the following submissions: (i) In case of Shri Satyanarayan Jhanwar, the assessee had furnished PAN which was also available in confirmation filed before the AO, along with details of name and address. The assessee received the loan amount on 6th April, 1996 by cheque and the same was repaid on 2nd May, 1997 by cheque. (ii) In case of creditor Mrs. Seema Khan, her PAN was furnished before the AO. The assessee also received the loan amount from this party by cheque and the same was repaid by the assessee by cheques and Rs. 8000 by cash. The assessee furnished the copy of account of Smt. Seema Khan. (iii) The details of all the creditors from whom loans were received by cheques were also mentioned in the extract of audit report in Annex. B. (iv) The assessee repaid the loans by account payee cheques to the creditors on various dates and the details of the same were furnished. (v) The assessee also furnished the copies of account of the above seven creditors. (vi) The assessee has submitted all the confirmation with names and addresses before the AO ....
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....ce and surrounding circumstances and by applying the test of human probabilities. (4) Devamani Atha vs. CIT (1978) 112 ITR 837 (Ori) Particularly with reference to the addition of Rs. 50,000 was unsustainable. An enquiry should have been made out whether the genuineness of the loan of Rs. 50,000 had been established and if that had been accepted the addition would have stood reduced by Rs. 50,000. (5) CIT vs. Luxmi Trading Co. (1979) 117 ITR 439 (Cal) Held, on the facts, that the conclusions reached by the Tribunal were possible conclusions, which a reasonable man could have arrived at. There was evidence before the Tribunal to support its finding. The deletion of Rs. 1,51,000 and Rs. 52,000 and interest thereon from the total income of the assessee for the asst. yr. 1963-64 was justified. (6) Addl. CIT vs. Bahri Bros. (P) Ltd. (1984) 42 CTR (Pat) 66 : (1985) 154 ITR 244 (Pat). The assessee discharged the primary onus and the assessee not only disclosed the identity of the creditors but also the sources of income. Then the onus shifted on the Department to verify. The creditors were having bank accounts. Hence, they were known not only to the bank but they were in....
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..... The AO finally assessed loss under s. 154/254 at Rs. 20,83,719. The AO levied the impugned penalty under s. 271(1)(c) in view of reduction in loss. The learned CIT(A) deleted the penalty by observing as under in para 5 of his order: "I have carefully gone through the facts of the case and submissions of the learned counsel. Respectfully following the judgments cited above and Expln. 4 to s. 271(1)(c) which was amended by Finance Act, 2002, I am of the opinion that the said amendment is applicable from 1st April, 2003. The provisions for imposing penalty being substantive law cannot have retrospective effect unless expressly stated by the legislature to be so applicable. There is no word or language from which it can be inferred that the amendment of s. 271(1)(c) of the IT Act, 1961 by the Finance Act, 2002 has retrospective operation. The law, which was in force at the time when the assessee filed his original return will be applicable. I, therefore, hold that the levy of penalty under s. 271(1)(c) is improper. I, therefore, cancel the order of penalty under s. 271(1)(c) of the IT Act, 1961." Aggrieved by the order of the learned CIT(A), the Revenue has filed the present ap....
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....ng substantive law cannot have retrospective effect unless expressly stated by the legislature to be so applicable. There is no word or language from which it can be inferred that the amendment of s. 271 by the Finance Act, 1968, has retrospective operation. The assessee submitted his returns for 1965-66 and 1966-67 on 1st March, 1967. In 1969, a notice under s. 148 was served on him in respect of those years and on the basis of the returns submitted assessment was completed and penalty proceedings were initiated. Considering the circumstance that the assessee co-operated with the Department the Tribunal imposed a minimum penalty for each of the two assessment years in question by applying s. 271 as it stood prior to 1st April, 1968. On a reference: Held, that the Tribunal was correct in its decision to impose a minimum penalty for each of the two assessment years in question by applying the law which was in force at the time when the assessee filed his original return. (2) Continental Commercial Corporation vs. ITO (1975) 100 ITR 170 (Mad) In the assessment of the petitioner for 1970-71, the return for which was filed on 22nd Dec., 1970, the officer included a sum of R....
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.... was to be assessed in relation to an assessment year in the past. The law prevailing on the date of passing of the assessment order or the initiation of penalty proceedings is also wholly immaterial for the purpose of imposition of penalty. (5) Suresh Seth vs. CWT (1977) 108 ITR 86 (P&H) A fiscal statute cannot be construed retrospectively unless there are clear words to that effect in the statute itself. Sec. 18(1)(a) of the WT Act, 1957, as amended by the Finance Act, 1969, is not retrospective in its operation. Under s. 18 the wrongful act on the part of an assessee becomes complete as soon as he does not file the return of his wealth on the stipulated date. His omission to do so does not make the wrongful act a continuing one, merely because the penalty on him may either continue or get enhanced. Penalty can be imposed on an assessee for failure to file a return on the due date only on the basis of the law, which was prevalent on that date. (6) Addl. CWT vs. Smt. Manjuladevi Muchhal (1979) 119 ITR 43 (MP) Wealth-tax-Penalty-Levy of-Law applicable-Returns for asst. yrs. 1961-62, 1962-63 and 1963-64, filed after due date on November, 1969-Amendment increasing rate....
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....re loss-Held, Yes" The counsel also distinguishes the judgment Cadbury Schweppes Beverages India (P) Ltd. vs. Jt. CIT. He says that in the aforesaid case the appeal against the scrutiny assessment was filed and withdrawn by assessee and the assessee had filed incorrect audit report under s. 44AB with the original return-The circumstances under which the assessee had to carryout second audit on 19th May, 1997 was not spelt out and above all the assessee could have revised its return after it received second audit report on 19th May, 1997 but it chose not to do so-Similarly, in respect of booking of expenditure of Rs. 10 lakh payable to PDL, the claim was incorrect and on being asked by AO, assessee changed its explanation though not substantiated-Concealment was thus writ large and assessee's case was covered by Expln. 1 to s. 271(1)(c)-As regards leviability of penalty in case where assessment resulted in a reduced loss, Expln. 4 to s. 271(1)(c) inserted by Taxation Laws (Amendment) Act, 2002 is clarificatory in nature-The case is covered by the jurisdictional Bombay High Court decision. The assessee had filed incorrect audit report under s. 44AB with the original return. 13.....
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....ble Madras High Court report in CIT vs. Inden Bislers (2000) 158 CTR (Mad) 323, has held that the mere fact that certain claim is disallowed, it does not follow that the assessee concealed any income. On the facts of the present case, it cannot be concluded that the assessee concealed any income or furnished inaccurate particulars thereof merely because the claim of the assessee was rejected by AO or the assessee surrendered the said claim of capital loss. The particulars of the share application money were distinctly shown in the various schedules filed along with the return. In penalty proceedings which are distinct from the assessment proceedings, the question to be considered is whether the assessee has concealed any income and not to see whether the claim or part of it is rightly disallowed or not. On the basis of the facts and material on record, we are of the considered opinion that the Revenue totally failed to prove the concealment in this case and in our view, this is not a fit case for levying the penalty under s. 271(1)(c). The learned CIT(A) has give cogent reasons for deleting the penalty of Rs. 2,40,000 and we do not find any infirmity in his order. The decisions rel....