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2021 (6) TMI 73 - ITAT PUNELevy of penalty u/s 271(1)(c) - disparity between the returned income and assessed income - Addition on account of unexplained cash deposits AND Addition on account of interest on savings bank account - HELD THAT:- On mere reading of the assessment order, it is evident that the appellant had offered an explanation in support of the sources for the cash deposits. It is stated by the appellant during the course of assessment proceedings as well as proceedings before the ld. CIT(A) that the cash deposits were made out of the withdrawals made from the bank through ATM. The Assessing Officer as well as the ld. CIT(A) had rejected this explanation by holding that no documentary evidence in support of the explanation was filed. It is not the case of the lower authorities that the assessee had filed a false explanation as result of which additions were made. It is settled position of law that mere rejection of the explanation does not entail levy of penalty u/s 271(1)(c) of the Act as held by the Hon’ble Supreme Court in the case of CIT vs. Reliance Petroproducts Pvt. Ltd. [2010 (3) TMI 80 - SUPREME COURT] We are of the considered opinion that it is not a fit case for levy of penalty u/s 271(1)(c) of the Act. - Decided in favour of assessee.
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