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TMI Blog2016 (9) TMI 797X X X X Extracts X X X X X X X X Extracts X X X X ..... claim by producing pre-dated agreements on subsequently purchased stamp papers. Therefore the evidence produced by the assessee is after thought and created only after the Assessing Officer has questioned the genuineness of the claim. In the absence of any contemporaneous supporting evidence we do not find any error or illegality in the orders of the authorities below for this issue. Addition on account of borrowed fund from villagers - Held that:- The Assessing Officer had enough reason to doubt the genuineness of the transaction as it is apparent that the assessee shown loan of 19,000 each from 34 persons. This fact itself shows that it is all well thought out claim of the assessee to escape the relevant provisions of the Act. Further all loans are shown as interest free loans which is not acceptable except in case of a close relatives nobody will advance loan without interest. The burden of proving the onus is on the assessee to produce the creditors specifically when the facts and circumstances clearly raise the suspicion on the very genuineness of the claim. Accordingly, we find that the assessee has failed to discharge his onus to prove the genuineness of the claim. This gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee and found that there is no such entry of ₹ 1 lakh appearing in the Axis Bank account. When this fact was pointed out to the assessee, the assessee submitted that in the cash book the Accountant wrongly typed as Axis Bank whereas it is loan taken from two persons namely Sri Yagati Naganna of ₹ 50,000 and Sri Nerlige Karinayak of ₹ 50,000. The assessee has also explained that the above amounts have been repaid to these two creditors on 21.7.2009 and 22.7.2009 respectively. The Assessing Officer did not accept this explanation of the assessee and made an addition of ₹ 1 lakh as unexplained cash credit. On appeal, the assessee has reiterated the contentions as raised before the Assessing Officer. The CIT (Appeals) was not impressed with the explanation of the assessee and confirmed the addition made by the Assessing Officer. 5. Before us, the learned Authorised Representative of the assessee has submitted that the assessee has submitted the relevant details in the assessment proceedings and also given the details of the repayment of the said amount to these two creditors. The learned Authorised Representative further submitted that the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per cash book. The assessee filed certain documents certified by Sri Mahaveer who was examined by the Assessing Officer. The assessee produced the contract dt.2.4.2009 and 5.4.2009 under which the amount of advance was claimed to have received against the agricultural income. The Assessing Officer verified the date of issue of stamp paper on which the contract dt.2.4.2009 and 5.4.2009 were executed and also received clarification from Karnataka Stat Registration and Stamp department and Multi Purpose Co-operative Society Ltd. who is responsible for printing and distribution of stamp paper. It was clarified that the same were issued in the market on 31.12.2010 onwards. When this fact was pointed out to the assessee, the assessee explained that the original agreement was written on a plain paper and later on the same was written on the stamp paper. The Assessing Officer did not accept this explanation and held that the alleged agreement is after thought as the assessee even did not produce the original agreement. Accordingly, the Assessing Officer made the addition of this amount as unexplained cash credit. On appeal, the assessee has reiterated the contention and explanation as r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... presentative and considered the relevant material on record. Except the alleged confirmations as produced before the Assessing Officer, no other evidence has been produced by the assessee. The Assessing Officer had enough reason to doubt the genuineness of the transaction as it is apparent that the assessee shown loan of ₹ 19,000 each from 34 persons. This fact itself shows that it is all well thought out claim of the assessee to escape the relevant provisions of the Act. Further all loans are shown as interest free loans which is not acceptable except in case of a close relatives nobody will advance loan without interest. The burden of proving the onus is on the assessee to produce the creditors specifically when the facts and circumstances clearly raise the suspicion on the very genuineness of the claim. Accordingly, we find that the assessee has failed to discharge his onus to prove the genuineness of the claim. This ground of the assessee is dismissed. 14. Before parting with the matter, we take note of the fact that the assessee has also shown agricultural income of ₹ 3,20,995 which has been accepted by the Assessing Officer therefore the addition sustained by us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grounds. As it is clear from the issue raised in the additional ground that it is pure legal in nature whereby the assessee is challenging the validity of notice issued under Section 274 r.w.s. 271(1)( c ) of the Act and supported the same with the judgment of Hon'ble jurisdictional High Court in the case of Manjunatha Cotton & Ginning Factory reported in 359 ITR 565. Since the additional grounds raised by the assessee does not require any fresh investigation of facts therefore, in the facts and circumstances of the case and in view of the judgment of Hon'ble Supreme Court in the case of NTPC Ltd. Vs. CIT 229 ITR 383, the additional ground raised by the assessee is admitted for adjudication. 19. The assessee has filed the notice issued under Section 274 r.w.s. 271(1)(c) of the Act and submitted that the Assessing Officer has not specified the default on the part of the assessee whether it is concealment of income or furnishing of inaccurate particulars of income. Therefore the said show cause notice under Section 274 is defective and illegal and consequently penalty is not sustainable. She has also relied upon the subsequent decision of the Hon'ble jurisdictional High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ground mentioned in Section 271 are mentioned would not satisfy requirement of law. (r) The assessee should know the grounds which he has to meet specifically. Otherwise, principles of natural justice is offended. On the basis of such proceedings, no penalty could be imposed to the assessee." 10. As regards Section 271(1-B) of the Act, it clearly indicates that the assessment order should contain a direction for initiation of proceedings. Merely saying that the penalty proceedings have been initiated would not satisfy the requirement, a direction to initiate proceeding shall be clear and not be ambiguous. 11. In the light of the said judgment of the Co-ordinate Bench, we are of the considered view that the Assessing Officer has not applied his mind at the time of issuing notice under Section 274 R/W Section 271(1)(b) of the Act. This view is fortified by the order passed under Section 271(1)(c) of the Act. No direction is coming forth in the assessments order for levying penalty which is mandatory as per Section 271(1B) of the Act. Considering the relevant factors, appellate commissioner has rightly allowed the appeal of the assessee settingaside the order passed by the As ..... X X X X Extracts X X X X X X X X Extracts X X X X
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