TaxTMI 
TaxTMI 
TaxTMI 
2016 (3) TMI 250
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....the Income Tax Act be deleted." 2. The assessment in this case was completed on 28/12/2006 wherein the addition on account of bogus cash creditor was made at Rs. 14,50,000/- by the Assessing Officer. Penalty proceeding U/s 271(1)(c) of the Income Tax Act, 1961 (in short the Act) has been initiated. The assessee had shown cash creditor for Rs. 4 lacs in the name of Smt. Veena Khatri. During the course of assessment proceedings, the Assessing Officer asked to produce confirmation form Smt. Veena Khatri, which was not produced by the assessee. As per the Assessing Officer, the assessee has not able to establish the genuineness of the transaction, the identity of the creditor and creditworthiness of the creditor. 3. Before imposing penalty U/....
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....of Hon'ble Rajasthan High Court in the case of Raghuveer Soni Vs ACIT (2002) 258 ITR 239 wherein it has been held that if in addition to failure to substantiate the explanation, the assessee also fails to prove that the explanation furnished by him was bonafide and that he has disclosed all material fact necessary for the assessment, then explanation-1 to Section 271(1)(c) operates. Accordingly, he imposed penalty at Rs. 1,23,600/-, which is 100% of tax sought to be evaded on concealed income. 4. Being aggrieved by the order of the Assessing Officer, the assessee the matter before the ld CIT(A), who had confirmed the penalty by observing as under:- "I have considered contentions of the appellant as well as submission of the assessee.....
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....is leviable. The ld Assessing Officer neither in the assessment order nor in penalty order, no where stated or alleged or proved that the assessee has concealed particulars of his income or furnished inaccurate particulars of income in its return of income. He relied on the decision of Hon'ble Supreme Court in the case of CIT Vs Reliance Petro products (P) Ltd. 322 ITR 158 (SC). The judgment of Hon'ble Supreme Court is squarely applicable on the facts of the assessee's case. The assessee had furnished its return of income on the basis of its regular audited books of account and on the basis of such books filed its return where he has shown all the income in the P&L account and balance sheet filed with the return. Thus, the asses....
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....96 (SC). (iii) Durga Kamal Rice Mills Vs CIT 265 ITR 25 (Cal.), CIT Vs Ishtiaqu Hussain 232 ITR 673 (All) & 11 TTJ 462 (JP), 21 TW 427 (JP). (iv) CIT Vs Santosh Financiaries 274 ITR 742 (Ker). (v) Udayan Mukherjee Vs CIT 291 ITR 318 (All) (vi) Gopal D Shetty Vs ITO (2008) 298 ITR (AT) 49 (Pune). Therefore, he prayed to delete the penalty confirmed by the ld CIT(A). 6. At the outset, the ld DR has vehemently supported the order of the ld CIT(A). 7. We have heard the rival contentions of both the parties and perused the material available on record. The assessee has shown cash creditor of Rs. 4 lacs in the name of Smt. Veena Khatri, Indore. The assessee had not furnished confirmation before the Assessing Officer, at the time of qua....