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Issues involved: Appeal against the levy of penalty under s. 271(1)(c) of the IT Act for asst. yr. 1994-95 based on unexplained cash credits introduced by the assessee.
Summary: The assessee introduced cash credits during assessment, leading to addition of &8377; 2,94,874. The penalty was imposed despite explanations and confirmations provided for the loans. The Tribunal found that the credits were genuine, supported by documents and statements, and the penalty was unjustified. The appeal of the assessee against the penalty levy was allowed. 1. Unexplained Cash Credits and Penalty Imposition: During assessment, cash credits were introduced by the assessee, leading to an addition of &8377; 2,94,874. The penalty of &8377; 1,32,667 under s. 271(1)(c) was imposed by the AO and confirmed by the CIT(A) due to non-production of creditors, despite explanations and confirmations provided by the assessee. 2. Assessee's Appeal and Tribunal's Consideration: The assessee appealed before the Tribunal, presenting written submissions and case laws to support their case. The Departmental Representative relied on the CIT(A)'s order during the proceedings. 3. Tribunal's Decision and Reasoning: After reviewing the orders of the AO and CIT(A), the Tribunal found that the penalty imposition was unwarranted. The Tribunal noted that during fresh assessment proceedings, the identity of cash creditors was proven through various documents and statements. The Tribunal observed that the credits were genuine, supported by evidence such as certificates, voter lists, and confirmations. 4. Justification for Cancelling Penalty: The Tribunal emphasized that the non-production of creditors did not imply the credits were bogus, as genuine details and confirmations were provided. The Tribunal found no evidence of concealed income, as all necessary details were submitted by the assessee. The Tribunal concluded that the penalty levy was unjustified and cancelled it, allowing the appeal of the assessee.
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