TaxTMI 
TaxTMI 
2013 (8) TMI 482
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.... of both the assessee and the Revenue, travelled up to the Tribunal, which vide its order dated 30.12.009 (in ITA No.5171/Mum/2008) restored the matter back to the file of the assessing authority for verification and determination afresh. The addition qua unexplained credits having been confirmed by the Assessing Officer (A.O.) in the second round, in respect of which the penalty proceedings had been initiated earlier, simultaneous with the completion of the assessment, vide notice dated 02.11.2005, penalty proceedings were revived by the issue of notices on 15.07.2010 and 23.07.2010. The assessee responded vide letter dated 28.07.2010, stating that all the material facts had been disclosed, and that there was no concealment or inaccurate furnishing of particulars of income on its part. The relevant annexures to its audit report for AY 2002-03 and 2003-04 were also filed. The credits appear as unsecured loans in the assessee's books of account from the following persons: i) Nick Lakhani Rs.11,00,000/- ii) Indian Trading Corpn. Rs.3,75,000/- iii) Nakul Jain Rs.1,60,000/- iv) Saroj Gupta Rs.1,75,000/- v) S. P. Capital Financing Ltd. Rs.40,000/- vi) Pr....
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....ngredients of section 271(1)(c) were satisfied as the assessee had not offered any explanation. Aggrieved, the assessee is in second appeal. 3.1 Before us, the assessee's case was that in view of its inability to repay the loans, the lenders had filed criminal complaints against it. The same would by itself confirm the genuineness of the loans. It was on account of this that the lenders had become uncooperative, and were disinclined to issue confirmation letters. In fact, part payments had been made to some of the creditors, and which would again go to show that the loans represented actual liability. On being queried by the Bench if the assessee was making out a new case before the tribunal, it was submitted by the ld. AR that the assessee had also taken the said plea before the ld. CIT(A), who though has not taken cognizance of the same. He would then take us to the assessee's paper-book (pgs.33-47), containing in the main copies of the legal notices aforestated. The same were also furnished before the authorities below. 3.2 The ld. DR, on the other hand, would place reliance on the orders of the Revenue authorities, claiming that no improvement in its case had been made by....
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....ific, we shall proceed credit-wise, as follows. 4.3 We examine the facts in respect of each credit, as under: i) Nick Lakhani - Rs.11,00,000/- : The credit arises during the current year (on 07.01.2003). No confirmation stands filed even in the penalty proceedings. Notice u/s.133(6) came back unserved. No legal notice has been issued by or on behalf of the creditor, which is stated as a reason by the assessee for the creditors being recalcitrant, and not issuing confirmative letters. The ld. AR, on being questioned in this regard during hearing, would submit that no such notice has been issued in this case for the reason that the creditor happens to be the assessee's friend. The argument is self-defeating inasmuch as there is no reason for the non-issue of any confirmation letter in the first place in that case. There is as such no iota of evidence on record toward the genuineness of this credit which presumably outstands even to date. The penalty in its respect is, therefore, confirmed. ii) Indian Trading Corpn. - Rs.3,75,000/- The credit arises in the assessee's books during the year on 29.05.2002 (Rs.2.50 lacs) and on 10.06.2002 (Rs.1.25 lacs). The legal notice da....
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....bt, the impugned amount stands received in the current year. No confirmation or, for that matter, any material has been furnished in respect of the credit of Rs.1.75 lacs. Notice u/s.133(6) to the creditor has also remained unresponded. No explanation, again, has been advanced, and at any stage, toward the genuineness of this 'loan', or for the non- furnishing of any evidence in its respect. The assessee's only explanation has been of the loan arising during an earlier year, and which has been found and proved as incorrect. Under these circumstances, the penalty stands correctly levied. We upheld the same. v) S. P. Capital Financing Ltd. - Rs.40,000/- Though a doubt had been created by the assessee as to the year of origin of this credit, a reference to the tax audit report for the current year as well as for the immediately preceeding year (extracted in the penalty order), make it abundantly clear that the same arises during the current year. In fact, the actual amount outstanding as on 31.03.2003 is Rs.90,000/-. The legal notice dated 23.02.2004, stating of loan of Rs.1 lac on 24.06.2002, which also mentions of three cheques dated 11.10.2003 for an aggregate of Rs.1 lac iss....