2010 (1) TMI 843

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....es of the case, the Commissioner of Income-tax (Appeals) is justified in confirming the penalty of Rs. 1,09,777 levied under section 271(1)(c) of the Income-tax Act. During the assessment year, the assessee has shown two loans obtained from two persons, viz., Ms. Vanaja and Shri G. Balasubramanian. The Assessing Officer asked the assessee to furnish the addresses of the creditors. Vide its letter dated May 29, 2007, the assessee furnished the addresses of the creditors and also filed the copies of the bank account for proof of collection of the cheques through bank accounts. To verify the genuineness of the creditors, the Assessing Officer issued summons under section 131 of the Income-tax Act. Out of two creditors, only one Ms. Vanaja app....

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....when the assessee has discharged his onus by producing all the relevant details and evidence to prove the loan taken from the creditor, then in the absence of proving the same as bogus, penalty is not warranted merely because the assessee agreed for the addition. Learned counsel for the assessee relied upon the following decisions:- CIT v. Balbir Singh [2008] 304 ITR 125 (P and H). Addl. CIT v. Smt. V. Kanakammal [1979] 118 ITR 94 (Mad). Addl. CIT v. Jiwan Lal Shah [1977] 109 ITR 474 (All). On the other hand, the learned Departmental representative has submitted that when the assessee has failed to prove the cash credits discovered by the Assessing Officer in the books of account, then, in view of the decision of the hon'ble Supreme Cou....