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TMI Blog2014 (4) TMI 671X X X X Extracts X X X X X X X X Extracts X X X X ..... elied upon is the statement of Mr. D.A. Sawant – the piece of material alone cast a serious doubt against the genuineness of the loan - this may not be conclusive for the penalty proceedings - Once the assessee furnished the explanation based on the material on record, he has to give a conclusive finding on such explanation whether it is a bonafide or has been substantiated or not – thus, the matter is remitted back to the AO to decide afresh about the penalty – Decided in favour of Assessee. - ITA No. 1248/Mum./2012 - - - Dated:- 11-4-2014 - Shri Sanjay Arora And Shri Amit Shukla,JJ. For the Petitioner : Mr. K. Gopal a/w Mr. Jitendra Singh and Mr. Narendra Pande For the Respondent Mr. Ashok Suri ORDER Per Amit Shukla, J. M. The aforesaid appeal has been preferred by the assessee challenging the impugned order dated 15th November 2011, passed by the learned Commissioner (Appeals) XXXVI, Mumbai, in the matter of penalty proceedings under section 271(1)(c), for the assessment year 2003 04. The sole dispute in this appeal is, whether or not the learned Commissioner (Appeals) was justified in confirming the penalty of Rs. 8,03,250 under section 271(1)(c) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns and answers, as reproduced in the penalty order as well as assessment order, is reproduced herein below: Q. What are your sources of income and are you assessed to tax? Ans. My only source of income is from salary. I do not have any other source of income. I am not assessed to tax but I have taken PAN recently no.BDPPS8188G allotted by UTI. I got the PAN card on 20.2.2006. Q. Have you given any loan to M/s. Shree Sai Construction? Ans. Yes. I have given loan of Rs. 20,00,000 as detailed below: Date Cheque no. Name of Bank Amount 17.4.2002 438382 Vijaya Bank, Chambur Rs. 5,00,000 17.4.2002 438383 Vijaya Bank, Chambur Rs. 5,00,000 17.4.2002 438384 Vijaya Bank, Chambur Rs. 5,00,000 17.4.2002 438385 Vijaya Bank, Chambur Rs. 5,00,000 Total: Rs. 20,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee had sought adjournment requesting for a date of hearing in January 2010 and on 18th January 2010, the assessee filed reply which had not been considered by the Assessing Officer. On merits, the assessee submitted that during the course of assessment proceedings as well as the appellate proceedings, the assessee had furnished all the details to prove the genuineness of the loan and merely because the additions have been sustained in the quantum proceedings, the penalty cannot be justified. In support of this proposition, various case laws were relied upon which has been incorporated by the learned Commissioner (Appeals) at Page 4 and 5 of the appellate order. It was further submitted that the assessee had furnished the bank accounts of the creditors from where these creditors have lent the money to the assessee and insofar as the sources of income of the lenders are concerned, it was very difficult to prove, due to various disputes with them. The assessee has thus, not only established the identity but also the immediate source of loan and without any further enquiry by the Assessing Officer the said loan cannot be treated as non genuine. The relevant reply on merits ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, had categorically admitted that he has given the loan to the assessee and also furnished the details of cheques and bank account. If the amount has been received from the third person in the lender s bank account, then the assessee does not have any onus to prove the source of the source. Thus, he submitted that no penalty is warranted on these facts. Similarly, in case of M/s. G.R. Industries, he submitted that the amount has been received through account payee cheque, therefore, no adverse inference should be drawn. He also emphasized repeatedly that the said loans have been repaid. 9. The learned Departmental Representative, on the other hand, strongly relying upon the penalty order as well as the order of learned Commissioner (Appeals), submitted that in the case of Mr. D.A. Sawant, statement was recorded, wherein he had admitted that the amount has been deposited in the bank account by Mr. Kawaljeet Singh Sachdeva, and the same amount was in turn given to the assessee. Thus, Mr. D.A. Sawant, was only a conduit. He also referred to the findings given by the Tribunal in the quantum proceedings to contend that the Tribunal has given categorical finding of the fact that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er has to be examined from the angle that whether the assessee is guilty of furnishing inaccurate particulars of income or concealment of income. In the penalty proceedings, the issue has to be examined afresh and the assessee may adduce fresh evidence in the penalty proceedings to establish by way of material, relevant facts which may come into effect as liability of penalty. The assessee even though may not file any fresh evidence but still may rely upon the existing material to prove that presumption raised by the Explanation would stand rebutted and he is not guilty of concealment of furnishing of inaccurate particulars of income or for concealment. In the present case, the sole material which has been relied upon by the Department as well as by the assessee is statement of Mr. D.A. Sawant. In the said statement itself, the said person has given categorical averment that he does not have any money of his own in his bank account but has been managed to be deposited by one Mr. Kawaljeet Singh Sachdeva. This piece of material alone cast a serious doubt against the genuineness of the loan. However, this may not be conclusive for the penalty proceedings. The learned Commissioner (Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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