1996 (10) TMI 126 - AT - Income Tax

Summary

Issues:
1. Quantum appeal regarding addition of non-genuine cash credits.
2. Penalties levied under various provisions of IT Act for asst. yr. 1981-82.

Quantum Appeal - Addition of Non-genuine Cash Credits:
The judgment pertains to appeals by the same assessee for the same year, with one being a quantum appeal (ITA No. 6809/Del/93) and the others related to penalties under the IT Act for the assessment year 1981-82. The Revenue challenged the deletion of an addition of Rs. 46,000 for non-genuine cash credits made by the Assessing Officer (AO). The Assessing Officer disallowed the claim for deduction of interest expenditure of Rs. 7,815 in the original assessment. The issue was restored to the file of the ITO by the AAC for verification of the genuineness of business loans. In a subsequent assessment, the AO disallowed the interest amount again and added Rs. 46,000 as non-genuine credits. The Dy. CIT(A) held that the addition of Rs. 46,000 was not valid as it was not part of the original assessment or appeal. The Dy. CIT(A) deleted the addition, stating that the genuineness of the cash credits was not in dispute during the original assessment. The Dy. CIT(A) justified his decision based on the lack of evidence supporting the addition of Rs. 46,000.

Penalties under IT Act for Asst. Yr. 1981-82:
The remaining three appeals by the Revenue were against penalties canceled by the first appellate authority. The Dy. CIT(A) canceled the penalties under sections 271(1)(a), 271(1)(b), and 271(1)(c) for the assessment year 1981-82, citing the quantum appeal decision in favor of the assessee and no tax liability after considering carried forward losses. The Revenue failed to provide material supporting the cancellation of penalties. The Dy. CIT(A)'s decision to cancel the penalties was supported by the assessee's counsel. The judgment confirmed the cancellation of penalties by the Dy. CIT(A) as there would be no tax due after considering the relief and carry forward losses, and the Revenue's arguments did not contest this aspect.

In conclusion, all appeals by the Revenue were dismissed, upholding the decisions regarding the quantum appeal on non-genuine cash credits and the cancellation of penalties under the IT Act for the assessment year 1981-82.