TaxTMI 
TaxTMI 
2011 (12) TMI 676
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the IT Act on the addition made u/s 68 without appreciating the fact that the AO had brought on records various material evidences to prove that the loans were not genuine. (2) On the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in deleting the penalty of Rs. 8,36,957/- imposed on the assessee u/s 271(1)(c) of the IT Act on the addition made u/s 68 without appreciating the fact that the assessee has failed to prove the genuineness and creditworthiness of the depositors during assessment proceedings as well as during the penalty proceedings. 2. None appeared on behalf of the assessee. So after hearing the ld. DR and going through the material on record we proceeded to decide the appeal. 3....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t AAFHB7781A 2,50,000/- Rs.1,86,281/- cash on hand as on 31.03.05 and income of Rs. 98,630/- during the year Lilyben Haribhai Babaria, 27, Kasturba Nagar Society, Nr. Baroda Prestige, Varachha Road, Surat. AJSPB 5809A 3,25,000/- Business income of Asst. Year 2005-06 and Asst. Year 2006-07 as per the enclosed return of income. Lilaben Virjibhai, 56, Maheshwari Society Varachha Road, Surat. AJTPB2072P 3,50,000/- Business income of Asst. Year 2006-07 and Asst. Year 2006-07 as per the enclosed return of income. Nareshbhai Haribhai (HUF) 27, Kasturba Nagar Society, Nr. Baroda Prestige, Varachha Road, Surat. AAFHB7780R 2,2....
X X X X Extracts X X X X
X X X X Extracts X X X X
....iya, 2) Lilaben Virjibhai and 3) Lilyben Haribhai being out of station could not be produced. Date of issue of Show cause notice No show cause notice was issued before making the addition. Even the copy of statement recorded in case of 4 persons was not given to assessee. Based on the above facts the assessee submits the following evidences: 1. The copy of submission dtd.27.01.2009 to CIT(A) containing 1 to 28 pages including the evidences of above depositors submitted to AO. 2. The copy of decision of the Hon'ble Gujarat High Court reported at 245 ITR 125 (page 29 to 37). The Hon'ble Gujarat High Court in the identical case held that even if, the assessee could not produce the depositors and cash credit add....
X X X X Extracts X X X X
X X X X Extracts X X X X
....elying on the decision of the Tribunal in the case of Dhirubhai Gajera vs. ITO in ITA No.1147/Ahd/2009 and the decision of Hon'ble Gujarat High Court in the case of National Textile vs. CIT 249 ITR 125 (Guj). Against this order of the ld. CIT(A), the Revenue is in appeal before the Tribual. 6. The ld. DR supporting the order of AO submitted that the loans were not genuine and were added to total income of the assessee u/s 68. The addition was also confirmed by the ld. CIT(A). Therefore, in view of the addition the penalty was rightly levied by the AO which has been wrongly deleted by the ld. CIT(A). 7. We have considered the rival submissions and perused the record. We find that in support of the claim the assessee had submitted the n....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of inaccurate particulars on the part of the assessee. Explanation -1 to section 271(1)(c) has no bearing on factor no.1 but has a bearing only on factor no.2. The explanation does not make the assessment order conclusive evidence that the amount assessed was in fact the income of the assessee. No penalty can be imposed if the facts and circumstances are equally consistent with the hypothesis that the amount does not represent concealed income with the hypothesis that it does. If the assessee gives an explanation which is unproved but not disproved i.e. it is not accepted but circumstances do not lead to the reasonable and positive inference that the assessee's case is false, the explanation cannot help the Department because there will be ....