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TMI Blog2015 (4) TMI 785X X X X Extracts X X X X X X X X Extracts X X X X ..... o the creditworthiness of the creditors. - However, de hors the said provision, it is not possible to state with certainty that the said sums would be “concealed income” of the assessee for the year under consideration. - it cannot be said with certainty that the sum received from the creditors would be “concealed income” of the assessee. - Following the judgment of National Textiles [2000 (10) TMI 19 - GUJARAT High Court] and Jalaram Oil Mills [2001 (6) TMI 15 - GUJARAT High Court] and of CIT vs. Khoday Eswarsa and Sons [1971 (9) TMI 19 - SUPREME Court] it is held that penalty cannot be sustained. - Decided in favour of assessee. - I.T.A. No.1030/Ahd/2011, I.T.A. No.2113/Ahd/2011 - - - Dated:- 20-2-2015 - Shri N. S. Saini And Shri Kul Bharat,JJ. For the Appellant : Shri M.J. Shah, AR For the Respondent : Shri M.K.Singh, Sr.DR ORDER Per Shri Kul Bharat, Judicial Member : These two appeals (quantum and penalty) by the Assessee are directed against the separate orders of the Ld.Commissioner of Income Tax(Appeals)-IV, Baroda ( CIT(A) in short) dated 17/01/2011 and 13/06/2011 pertaining to Assessment Year (AY) 2003-04 respectively. These appeals we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... numbers vide which the loan amount was received. Hence, the loan transactions were effected through banking channels. He submitted that the AO ought to have enforced the presence of creditors by exercising the powers as conferred on the AO by the Act. He submitted that under these facts, the AO should not have made addition. He further submitted that the assessee cannot be fastened with unreasonable tax liability. 4.1. On the contrary, ld.Sr.DR Shri M.K.Singh vehemently opposed the submissions of the ld.counsel for the assessee and pointed out that the assessee was given sufficient opportunities by the authorities below to produce the evidences proving the genuineness of the transactions and creditworthiness of the creditors. He submitted that the onus was upon the assessee to furnish these primary evidences. He submitted that the authorities below have categorically given a finding that the assessee could not prove the creditworthiness of the creditors and also the summon(s) issued to some of the parties; namely, Dhirubhai P.Patel which was returned with the postal remarks that no such person existed there. 5. We have heard the rival submissions, perused the material availab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant now to turn around and say that after so many years, it is not possible for him to lead evidence [Pushp Trading Co. vs. CIT (1991) 190 ITR 618 (Del)]. Appellant s contention that onus was shifted to the Department is totally unacceptable. The general principle as to when the onus shifts, as laid down in Stoney vs. Eastbourne RD Council (1927) 1 Ch.367, 397 is there can only be sufficient evidence to shift the onus from one side to the other if the evidence is sufficiently prima facie to establish the case of the party on whom the onus lies. It is not merely a question of weighing feathers on the one side or the other, and on saying that if there were two feathers on one side and one on the other, that would be sufficient to shift the onus. What is meant is, that in the first instance, the party on whom the onus lies must prove his case sufficiently to justify a judgement in his favour if there is no other evidence. Appellant has not been able to adduce sufficient evidence to prima facie establish its case regarding identity of the creditors or their capacity to advance the money. It was appellant s responsibility to provide whereabouts of the creditors co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case of Dharmendra Textile vs. Union of India reported in (2008) 306 ITR 277. 02. The appellant prays to leave, amend, alter or cancel ground of appeal at the time of hearing. Relief claimed in appeal We request your Honor to delete the penalty levied u/s.271(1)(c). 6.1. Briefly stated facts are that the case of the assessee was picked up for scrutiny assessment and the assessment u/s.143(3) of the Act was framed vide order dated 31/03/2006, thereby the AO made various additions and also initiated penalty proceedings u/s.271(1)(c) of the Act on such additions. Out of three additions; namely, addition amounting to ₹ 50,12,491/- on account of payment made to sub-contractors/labour contractors by treating the same as bogus, addition of ₹ 15 lacs made on account of unexplained loan by treating the same as assessee s income from undisclosed source and addition of ₹ 41,626/- being the difference in closing stock of M/s.A.P.Construction. On appeal, the ld.CIT(A) sustained the additions of ₹ 15 lacs ₹ 14,626/- and deleted the addition of ₹ 50,12,491/-. On this sustained addition, the AO levied the penalty at 100%. Against this, assessee fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the depositors. He submitted that the assessee failed to discharge this primary onus by furnishing the evidences. 8. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below as well as the judgements/decisions relied upon by the ld.counsel for the assessee. Admittedly, the deposits have been received through banking channels. The assessee has furnished confirmations from creditors. However, the assessee could not enforce the presence of the creditors before the assessing authority. There is no finding by the authorities below that the money belonging to the assessee has been circulated through the socalled creditors. The addition has been sustained on the basis that the assessee could not discharge its onus with regard to the creditworthiness of the creditors. The Hon ble Gujarat High Court rendered in the case of National Textiles vs. CIT (supra) held as under:- 22. In order to justify the levy of penalty, two factors must co-exist, (i) there must be some material or circumstances leading to the reasonable conclusion that the amount does represent the assessee s income. It is not enough for the purp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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