2016 (7) TMI 1312

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... 3. The facts of the case are that the assessee is an individual, engaged in the business of executing civil contact woks and for assessment year 2006-07, assessee filed the return of income on 11.09.2006 showing a total income of Rs. 1,97,415/-.The said return was originally processed u/s.143(1) of the Act. Later, the assessment was framed u/s.143(3) of the Act on 31.12.2008 and the total income was computed at Rs. 33,21,420/-. While completing the assessment, the AO made the following additions. a) Disallowance of Sundry Creditors 14,00,000/- b) Disallowance of Loan Creditors 10,00,000/- c) Excess claim of depreciation 99,000/- d) Agricultural income 1,25,000/- e) Consultancy charges 5,00,000/-   ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....reditor - Mr.Velumani 1,65,000/- e) Agricultural income 1,25,000/- Total 7,57,001/-   The CIT(A) confirmed each of the above addition by observing as follows:- i) M/s.Sabari Cottage Industries - Rs. 1,67,001/-: M/s.Sabari Cottage Industry failed to respond to the summons issued. The genuineness of the transaction was doubted by the AO. ii) Mrs.Malliga - Rs. 1,00,000/-: Summons issued, return was un-served. The party has given a confirmation letter stating that out of balance of Rs. 3,06,666/-, outstanding is at Rs. 2,06,666/- represents the amount due from the assessee and Rs. 1 lakh adjusted towards advance given to the assessee for repairing the house. iii) Mrs.Radhamani-Rs. 2,00,000/-: In respe....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....r imposition of penalty, since it relates to lack of tendering explanation to the satisfaction of the ld. Assessing Officer and not disproving the contention of the assessee with regard to the genuineness of the receipts. As held by the Calcutta High Court in the case of Durga Kamal Rice Mills Vs. CIT reported in [2004] 265 ITR 025 relying on M/s.National Textiles reported in [2001]249 ITR 125(Guj.), there is a difference in "facts not proved" and "facts disproved". It is further held that penalty can be levied only for the latter. Similar view has been taken in CIT v. Vidyagauri Natverlal & Ors., reported in [1999] 153 CTR 546 (Guj). Being so, in the present case, the explanation given by the assessee not disproved by the ld. Assessing Off....