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TMI Blog2016 (3) TMI 414X X X X Extracts X X X X X X X X Extracts X X X X ..... iven by the assessee is that he has received back ₹ 1.50 lakhs from Shri Anvarbhai Kapadia and that amount was deposited in the bank account. The AO has accepted the facts that a sum of ₹ 3.00 lakhs advanced by the assessee, but disbelieved the explanation of ₹ 1.50 lakhs. Again the explanation of the assessee was not held to be false. Therefore, in view of our discussion, we are of the view that the assessee does not deserve to be visited with penalty under section 271(1)(c) of the Act, and accordingly impugned penalty in both the appeals are cancelled. - Decided in favour of assessee - ITA. No. 904 and 905/Ahd/2014 - - - Dated:- 1-3-2016 - Shri Rajpal Yadav, Judicial Member And Shri Manish Borad, Accountant Member ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . He determined the taxable income of the assessee at ₹ 30,99,810/- on the ground that deposits have been made in FD/OD account which remained unexplained. He made addition with the help of section 69 on account of unexplained investments. 4. Dissatisfied with the addition, the assessee carried the matter before the CIT(A). The ld.First Appellate Authority has deleted the addition of ₹ 25,99,806/- and confirmed addition of ₹ 5 lakhs. 5. In the Asstt.Year 2003-04, the ld.AO has made an addition of ₹ 1,50,000/-. The ld.AO has initiated penalty proceedings in both the years under section 271(1)(c) of the Act and imposed penalty of ₹ 1,50,000/- in the Asstt.Year 2002-03 and ₹ 20,000/- in the Asstt.Year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e on record to prove that the assessee has taxable income in India or explanation given by him is false. 7. As far as the facts in the Asstt.Year 2003-04 are concerned, a sum of ₹ 3.50 lakhs was given to Shri Anvarbhai Kapadia. He has repaid ₹ 1.50 lakhs. The assessee has deposited this amount in the FD/OD account. The AO has rejected the explanation of the assessee on the ground that the assessee could not prove that same amount was deposited by him. In other words, the assessee failed to prove that Shri Anvarbhai Kapadia has encased the cheque given by the assessee, and thereafter, withdrew the amount refunded to the assessee and that very amount was deposited in the account. 8. We have considered rival submissions and g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e been disclosed by him, then, the amount added or disallowed in computing the total income or such person as a result thereof shall, for the purposes of Clause (c) of this sub-section, be deemed to represent the income in respect of which particulars have been concealed. 9. A bare perusal of this section would reveal that for visiting any assessee with the penalty, the Assessing Officer or the Learned CIT(Appeals) during the course of any proceedings before them should be satisfied, that the assessee has; (i) concealed his income or furnished inaccurate particulars of income. As far as the quantification of the penalty is concerned, the penalty imposed under this section can range in between 100% to 300% of the tax sought to be evade ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that explanation given by the assessee is false. In the second situation, the deeming fiction would come to play by the failure of the assessee to substantiate his explanation in respect of any fact material to the computation of total income and in addition to this the assessee is not able to prove that such explanation was given bona fide and all the facts relating to the same and material to the computation of the total income have been disclosed by the assessee. These two situations provided in Explanation 1 appended to section 271(1)(c) makes it clear that that when this deeming fiction comes into play in the above two situations then the related addition or disallowance in computing the total income of the assessee for the purpose of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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