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2015 (11) TMI 1383

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....) has erred in deleting penalty u/s 271(1)(c) of the Act without considering the fact that Explanation 1 to section 271 of the Act is clearly applicable to the case of the assessee as the assessee had failed to substantiate the explanation offered by him. 2. On the facts and in the circumstances of the case, the learned CIT(A) ought to have upheld the order of the Assessing Officer. 3. The appellant craves leave to add to, amend or alter the above grounds as may be deemed necessary. Relief claimed in appeal. It is, therefore, prayed that the order of the CIT(A) on the issues raised in the aforesaid grounds be set aside and that of the Assessing Officer be restored." 2. It is second round of proceedings before us, as, in the consid....

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....y previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to Income-tax as the income of the assessee in hat previous year. In the instant case, the assessee had not been able to prove the creditworthiness of the creditor from whom a loan of Rs. 10 lakhs has been taken. It was the further contention of the assessee that because of heavy loss of Asst. Year 1997-98 and also heavy brought forward loss, the assessee did not file any appeal before the ld. CIT (Appeals). It is further stated that non-filing of appeal before the CIT (Appeals) does not amount to filing of inaccurate pa....

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....emed to be the result of concealment/furnishing of inaccurate particulars of income. Explanation 1 states a rule of law that in every case of addition to the returned income, there is a presumption of concealment. This presumption is rebuttable. The onus of rebutting such presumption is on the tax payer. The presumption can be rebutted by offering a plausible explanation. Where no explanation is offered, the assessee would be liable for penalty. In the instant case, no plausible reply could be offered by the assessee by adducing any corroborative evidence. The same mounts to furnishing of inaccurate particulars of income. In the case of Dharmendra Textiles Processors [294 ITR], the apex court has held that there is no necessity of mens rea ....

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....assessee for furnishing inaccurate particulars of income and concealing the income for which it is liable to for penalty u/s. 271(1)(c) of the Income-tax Act, 1961. I, therefore, levy a penalty of Rs. 4,60,000/- as against minimum penalty leviable at Rs. 4,60,000/- and maximum penalty leviable t Rs. 13,80,000/- in this case." 3. Aggrieved by the penalty so imposed by the Assessing Officer, assessee carried the matter in appeal before the CIT(A) who deleted the said penalty. While doing so, his line of reasoning was as set out below :- "5. I have considered the contentions of the A.O. and the submissions made by the appellant. In this case the addition has been made only because the appellant could not furnish the detail of the A.O. with ....