TaxTMI 
TaxTMI 
1983 (1) TMI 97
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....of Rs. 2,45,130 u/s. 143 (3) of the Act, on 31st March 1978. One of the components of the total income determined by the ITO was Rs. 13,000, which was included in the total income of the assessee in the following manner: "On scrutiny of cash book the following deposits were found : Rs. 5,000 Smt. Rani Gupta, Rs. 2,000 Smt. Sheela Rani Gupta, Rs. 3,000 Shri Hans Raj Rs. 3,000 Shri Navin Chand Gupta Rs. 13,000 . Vide Order sheet dated 23rd March 78, assessee was required to prove the nature and source of these deposits. No evidence has been filed. It thus appears that assessee has nothing to say to prove these deposits. Accordingly a sum of Rs. 13,000 is treated as assessee's income form undisclosed sources....
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....llant to prove that there was no fraud or gross or wilful neglect and if this onus is not discharged, then penalty would be leviable. In the subsequent decision of the Hon'ble Allahabad High Court in the case reported at 127 ITR 837 in Zeekoo Shoe Factory their Lordships have held that an assessee has to show that his explanation came within the purview of preponderance of probability or reasonable doubt and if that is done, the onus under the Explanation would stand discharged. However, in the instant case, no explanation whatsoever has been produced regarding cash credits of Rs. 13,000 and hence the onus has not been discharged. Actually speaking, the appellant had surrendered the amount and under the circumstances the decision of the Hon....
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.... s. 271(1)(c) of the Act, as it stood for the year under consideration, no penalty could have been imposed u/s. 271(1)(c) of the Act in respect of the addition of Rs. 13,000 made in the assessment. Relying on the decision of the Hon'ble Gauhati High Court in the case of CIT vs. Assam Travels Shipping Services 1977 110 ITR 359 (Gau), the ld. counsel for the assessee submitted that since the IT Authorities had applied wrong provisions of the Act, the penalty imposed u/s. 271(1)(c) of the Act deserved to be cancelled. Alternatively, the ld. counsel for the assessee submitted that if at all, the penalty was impossible u/s. 271(1)(c) of the Act in respect of the addition of Rs. 13,000 made in the assessment, the same could have been imposed with....
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....licable in the instant case. Thereafter, he referred us to the proviso to Explanation (1) of s. 271(1)(c) of the Act and submitted that since the assessee had not given any explanation in respect of the addition of Rs. 13,000 made in the assessment, the assessee would not be entitled to get any benefit out of the said proviso. In this connection, he also stated that the assessee had not given any material regarding the deposits in question either at the assessment stage or during the proceedings initiated u/s. 274/271(1)(c) of the Act. In this connection, he invited our attention to the assessee's letters dt. 30th March, 1978 addressed to the ITO during the assessment proceedings and dt. 22nd June 1978 addressed to the ITO during the penalt....