1981 (9) TMI 212

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.... in bhusar grains, sliver and money lending. Its relevant accounting year was S.Y. 2028 in which the it noticed deposit in the account of Rikabchand Surjmal Jain of Rs. 500 on 20th May, 1972 and Rs. 4,500 on 15th May, 1972. After the withdrawal of Rs. 2,000 on 20th August, 1972, the credit balance in the said account was of Rs. 3,000 at end of the accounting year. The assessee filed confirming let....

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....or on the said affidavit. In the assessment order, after narrating the above mentioned facts, the ITO held that the said depositor was a man of ordinary means and was not capable of advancing Rs. 5,000 with his meagre salary. He, therefore, treated Rs. 5,000 as the assessee's income from undisclosed sources. The said addition was confirmed by AAC who observed that the depositor being an employee c....

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....re was no fraud or gross or wilful neglect on his part. 5. At the hearing before us, the ld. counsel for the assessee stressed that penalty had been levied on the ground that the assessee had not satisfactorily explained the deposits in question and on the basis that the assessee's explanation had been rejected. There was no independent evidence to prove the falsity of explanation given by the ....

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....that even the falsity of the assessee's explanation was not sufficient for levy of penalty and the ITO must place on record cogent material of evidence to bring home the charge of concealment. It was claimed that Explanation to s. 271(1)(c) was inapplicable as there was no fraud or gross or neglect on the part of the assessee because he had produced the depositor who had admitted having made the d....