TaxTMI 
TaxTMI 
2010 (6) TMI 608
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.... file all the relevant loan confirmations and also to discharge its onus regarding creditworthiness and identity of 10 parties including Neelam R. Bhatia Rs. 50,000 and Fountain Mix Rs. 1 lakhs. The assessee has made written submission vide letter dated January 11, 2001, inter alia, stating as under (page 6 of assessment order) : "As regards loan parties, loan confirmations indicating their I. T. Nos. were filed with you in earlier hearing. You may summon them for further information. For your information most of the parties are through finance broker and we do not have any direct contact with them." 3. The Assessing Officer after considering the assessee's submission observed that the burden of proof squarely lies on the assessee to prove the identity of the creditors, their capacity to advance the loans and genuineness of the transactions as held by the hon'ble Calcutta High Court in the case of Shankar Industries v. CIT [1978] 114 ITR 689 and CIT v. Korlay Trading Co. Ltd. [1998] 232 ITR 820. The assessee has failed to discharge the burden of proof even after being allowed specific opportunity vide notice dated December 4, 2000. He further observed that regarding two credi....
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....during the same year. Further, the address of these parties as available with the assessee was disclosed in Annexure-X of the tax audit report. Further an addition made in the assessment by invoking the provisions of section 68 cannot form a basis for imposition of penalty under section 271(1)(c). The assessee while relying on the decision in Hindustan Steel Ltd. v. State of Orissa [1972] 83 ITR 26 (SC) requested to drop the penalty proceeding. However, the Assessing Officer did not accept the assessee's explanation. He observed that it is trite law that mere payment by cheque is not required. He further observed that the assessee has not been able to establish the genuineness of the cash creditors and failed to give a bona fide explanation regarding the other items as required under Explanation 1 to section 271(1)(c). In view of this, the assessee has committed a default of concealment of particulars of income and therefore the assessee is liable for imposition of penalty under section 271(1)(c) and accordingly he imposed penalty of Rs.67,300 being 100 per cent. of the tax sought to be evaded on the concealed income of Rs. 1,92,286, vide order dated March 29, 2006 passed under sec....
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....the sum so credited may be charged to income-tax as the income of the assessee of that previous year." 10. According to this section, any sum found credited in the books of the assessee maintained for a previous year may be charged to income-tax as the income of the assessee of that previous year, if- (1) the assessee offers no explanation about the nature of sources of such sum, or (2) the explanation offered by him is, in the opinion of the Assessing Officer, not satisfactory. 11. In the case before us we find from the assessment order that in response to the Assessing Officer's letter dated December 4, 2000 the assessee vide letter dated January 11, 2001 has submitted as under : "As regards loan parties, loan confirmations indicating their I. T. Nos. were filed with you in earlier hearing. You may summon them for further information. For your information most of the parties are through finance broker and we do not have any direct contact with them." 12. Apart from this the assessee has also filed a letter dated November 24, 2000 from Shri Suresh F. Hinduja, a finance broker through whom the loans were taken which reads as under : "To whomsoever it may concer....
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....he particulars of the income of the assessee. Secondly, the assessee must have furnished inaccurate particulars of his income. The meaning of the word 'particular used in section 271(1)(c) would embrace the details of the claim made. Where no information given in the return is found to be incorrect or inaccurate, the assessee cannot be held guilty of furnishing inaccurate particulars. In order to expose the assessee to penalty, unless the case is strictly covered by the provision, the penalty provision cannot be invoked. By no stretch of imagination can making an incorrect claim tantamount to furnishing inaccurate particulars. There can be no dispute that everything would depend upon the return filed by the assessee, because that is the only document where the assessee can furnish the particulars of his income. When such particulars are found to be inaccurate, the liability would arise. To attract penalty, the details supplied in the return must not be accurate, not exact or correct, not according to the truth or erroneous. Where there is no finding that any details supplied by the assessee in its return are found to be incorrect or erroneous or false there is no question of inv....