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TMI Blog1983 (4) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... onstruction of a temple at Hastinapur and the other in respect of loans worth Rs. 1,40,000 as represented by pronotes seized at the time of the raid. After prolonged proceedings and inquiry the assessment culminated in an addition of Rs. 28,500 in the hands of the assessee, individual, for asst. yr. 1975-76 being 50% of the in undisclosed income of Rs. 57,000 held to be assessable in the hands of the individual and the HUF in equal proportions. Penalty proceedings under s. 271(1)(c) came to be initiated and a penalty of Rs. 30,000 was imposed by the IAC (Asst.). On appeal, the CIT (A) cancelled the penalty. The Revenue is aggrieved and has come up in appeal before us. 4. Shri M. K. Chakraborty, the ld. Departmental Representative appeared on behalf of the Revenue. It is contended that the assessee in this case was fully exposed by the incriminating documents seized during the raid by the departmental Authorities. The investment in the temple at Hastinapur was not denied. The estimate of investment was reasonable and the assessee, in fact, admitted the investments and agreed for addition in his total income. Even with regard to the pronotes the assessee explained the source of inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... additions will not be made subject-matter of proceedings under s. 271(1)(c). This was done as the assessee was falling in heath and would not like to leave behind heavy Income-tax liabilities to his children. The Revenue cannot in one hand agree with some of the proposals and reject part of the offer. Since it was a composite deal, the Revenue, in the first instance should have honoured the agreement and no penalty proceedings should have been initiated. Even in any case, it was a case of rejection of the explanation of the assessee and there was no proof of assessee concealing any income or making unexplained investment under s. 69. In the case of the temple, the assessee was neither the owner nor donor of the temple. He was merely in charge of construction. As such he is not personally liable to explain the investment made therein. Even if there is discrepancy in the investment, the discrepancy cannot be imputed to the assessee. The source of the investment were duly explained as coming out of the cash collection from the Gullak in the temple as well as from donations by some Jain families. Similarly with regard to the pronotes it is claimed that the mere existence of pronotes wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... title the imposition of the penalty. 7. We have carefully considered the rival submissions in the light of the materials placed on our record. It is fact that construction of a temple in Hastinapur was made during the relevant assessment year. It is, however, not denied that the temple did not personally belong to the assessee. He was made in charge of the construction by the Hastinapur Digamber Jain Kshetra Committee. The cost of construction as per record seized at the time of the raid came to Rs. 1,57,475 spread over the asst. yrs. 1974-75 to 1976-77. The withdrawals of the assessee as per the books seized were to the tune of Rs. 94,500 and the Revenue alleged that the difference was made out of the undisclosed income of the assessee. The assessee resisted the same by stating that the uncovered investments were made out of the donations of various Jain families including pilgrims who donated through the Gullak (cash box) placed in the temple. The IAC (Asst.), however, rejected the explanations and held the same to be undisclosed income of the assessee. 8. Similarly, three pronotes were seized at the time of the raid. The pronotes indicated that loans to the tune of Rs. 1,40, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l as collections from Gullak. The General Secretary of the Hastinapur Digamber Jain Kshetra Committee confirmed the statement of the assessee in this regard. Similarly, individual donors gave their comfirmatory certificates in regard to the donations made by them which were not disproved. Similarly, with regard to the pronotes, the assessee denied having advanced any cash to the parties. The parties confirmed this statement and have denied having taken loan from the assessee. They, however, confirmed having signed some papers to facilitate credit purchase of yarn from the assessee. They also categorically denied having paid any interest to the assessee. 10. In this view of the matter and considering the Revenue did not bring out any evidence to support its presumption we hold that on these facts, no penalty under s. 271(1)(c) is exigible. If the difference in investment in temple is made out of the donations and collections from the Gullak, then there is no occasion for the assessee to explain the alleged discrepancy between the investment made in the temple and the withdrawal made by him in his books for that purpose. Similarly, there is no question of assuming interest received ..... X X X X Extracts X X X X X X X X Extracts X X X X
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