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TMI Blog1992 (11) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... made the addition noting in the process that the same could not be proved by the assessee in spite of the specific opportunities having been provided to him. On further appeal, the CIT(A) upheld the addition and on second appeal before the Tribunal, the assessee did not meet with any success. It would be relevant to record the observations of the Tribunal while confirming the addition as follows: "Before us since no material has been put forward on behalf of the assessee to show that the requisites of a genuine cash credit had been established, we find no warrant or justification for any interference with the orders of the Income-tax authorities in this regard. This addition is, therefore, maintained." 4. The learned counsel for the assessee at the outset stated that Smt. Laxmi Devi, the creditor, was a person of means and this fact was further substantiated by the order of the Tribunal in the quantum appeal, whereby they had discussed the background leading to the acquisition of a silver bar by her and in the ultimate analysis accepting that a part of it vis. to the extent of 29.960 kgs. stood established. A reference was also made to the gold ornaments owned by Smt. Laxmi De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd the relevant evidence with a view to substantiate the genuineness of the amount deposited. A perusal of the orders passed by the IT authorities as also by the Tribunal in the quantum appeal goes to show that no attempt was made at any stage to bring on record any evidence, whatsoever. That being the situation, the penalty under s. 271(1)(c) viz. on the addition of Rs. 10,000 is confirmed. 9. We are, however, not in a position to sustain the penalty in so far as it pertains to the other two items. The addition of Rs. 1,100 vis-a-vis the cash credit of Rs. 10,000 is a notional one. The learned counsel has categorically stated that the assessee has not claimed any deduction and, in fact, no interest has been paid. That being the situation and in view of the fact that the addition of Rs. 10,000 has been confirmed, the only conclusion which can be arrived at is that the amount of Rs. 1,100 represented a payment to "self". No doubt, the addition has been sustained in the quantum proceedings, but in so far as the penalty under s. 271(1)(c) is concerned, we cancel the same. 10. As regards the withdrawals towards household expenses perusal of the orders of the tax authorities as also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ghter and daughter-in-law of the assessee. (ii) That in respect of the silver bar stated to be belonging to the assessee and a part of the one belonging to his wife, Smt. Laxmi Devi and in respect of which the addition had been sustained by the Tribunal, it was a case of non-acceptance of the explanation. (iii) That in the wealth-tax proceedings, the AAC had accepted the assessee's explanation with regard to the acquisition of silver bars. (iv) That in an order under s. 35 of the WT Act on 20th Aug., 1986, the AAC had held that the assessee was entitled to the deduction of the loan taken from the three ladies, namely, his wife, his daughter and his daughter-in-law. (v) That the advancing of loans to the assessee by the three ladies was duly reflected in the WT returns. (vi) That no fresh assets had been created inasmuch as after examining the totality of the circumstances, it would be noticed that not only in the case of the appellant, but in the case of the ladies as well, the total assets remained more or less the same and it was a case of conversion of gold ornaments into silver bars. (vii) That it was not a case where no explanation was offered or a case where the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments of the ladies by the learned AAC. Argument about the totality of assets not increasing but only being converted from gold to silver is also plausible. Thus, as far as the additions on account of silver bars are concerned, to my mind, the material on record may be sufficient for making additions in the quantum assessment but is not conclusive proof of concealment of income earned during the relevant assessment year but not disclosed. It is a well settled law that the onus to be discharged in penalty proceedings by the Revenue is higher than in assessment proceedings. In the penalty proceedings, the Revenue has to establish that the assessee was guilty of concealing the particulars of income. Merely because the explanation put forth by the assessee has been rejected, would not follow that the penalty is exigible. The nature of penalty proceedings continues to be quasi-criminal and existence of mens rea or guilty mind is to be established before the penalty is levied. The penalty proceedings being penal in nature, there must be some positive cogent material or evidence to prove the guilt. If the only evidence on record is rejection of explanation, it is not sufficient material f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the effect that the explanation was not bona fide or false or unsubstantiated. 17. We have examined the rival submissions and have also perused the material on record to which our attention was invited by the parties. The decisions cited at the bar have also been duly considered. In our opinion, this is a case to which penalty proceedings under s. 271(1)(c) are not attracted. We have perused at length the orders passed by the tax authorities as also by the Tribunal in the quantum proceedings and we do not find any mention to the effect that the explanation given by the assessee was either false or unsubstantiated or not bona fide. According to us, it is a case of non-acceptance of the explanation offered and which, as the CIT(A) has rightly mentioned, may be good enough for sustaining an addition but the same may not hold good in penalty proceedings under s. 271(1)(c). We have already reproduced the extract from the order of the CIT(A) whereby he has proceeded to cancel the penalty and there are obvious findings of fact recorded therein, such as the disclosure of the loans as also the silver bars in the WT returns by the ladies and the corresponding deduction of the latter in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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