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TMI Blog2011 (12) TMI 676X X X X Extracts X X X X X X X X Extracts X X X X ..... 68 without appreciating the fact that the AO had brought on records various material evidences to prove that the loans were not genuine. (2) On the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in deleting the penalty of ₹ 8,36,957/- imposed on the assessee u/s 271(1)(c) of the IT Act on the addition made u/s 68 without appreciating the fact that the assessee has failed to prove the genuineness and creditworthiness of the depositors during assessment proceedings as well as during the penalty proceedings. 2. None appeared on behalf of the assessee. So after hearing the ld. DR and going through the material on record we proceeded to decide the appeal. 3. The effective ground is regarding deletion o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on hand as on 31.03.05 and income of ₹ 98,630/- during the year Lilyben Haribhai Babaria, 27, Kasturba Nagar Society, Nr. Baroda Prestige, Varachha Road, Surat. AJSPB 5809A 3,25,000/- Business income of Asst. Year 2005-06 and Asst. Year 2006-07 as per the enclosed return of income. Lilaben Virjibhai, 56, Maheshwari Society Varachha Road, Surat. AJTPB2072P 3,50,000/- Business income of Asst. Year 2006-07 and Asst. Year 2006-07 as per the enclosed return of income. Nareshbhai Haribhai (HUF) 27, Kasturba Nagar Society, Nr. Baroda Prestige, Varachha Road, Surat. AAFHB7780R 2,25,000/- Business income of Asst. Year 2006-07 as per the enclosed return of income Smith Jayantibhai 56, Maheshwari Society V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in case of 4 persons was not given to assessee. Based on the above facts the assessee submits the following evidences: 1. The copy of submission dtd.27.01.2009 to CIT(A) containing 1 to 28 pages including the evidences of above depositors submitted to AO. 2. The copy of decision of the Hon'ble Gujarat High Court reported at 245 ITR 125 (page 29 to 37). The Hon'ble Gujarat High Court in the identical case held that even if, the assessee could not produce the depositors and cash credit added as income of the assessee the penalty cannot be levied. In the case of assessee all the evidences were submitted to AO and even the depositors were produced. All the depositors are assessed to tax and they are regularly filing the return of inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is in appeal before the Tribual. 6. The ld. DR supporting the order of AO submitted that the loans were not genuine and were added to total income of the assessee u/s 68. The addition was also confirmed by the ld. CIT(A). Therefore, in view of the addition the penalty was rightly levied by the AO which has been wrongly deleted by the ld. CIT(A). 7. We have considered the rival submissions and perused the record. We find that in support of the claim the assessee had submitted the names and addresses, PANs, confirmations, computation of income, profit & loss account and balance sheet, acknowledgements of IT returns of all the creditors before the AO. Four out of seven creditors were produced before AO and the remaining three creditors cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed was in fact the income of the assessee. No penalty can be imposed if the facts and circumstances are equally consistent with the hypothesis that the amount does not represent concealed income with the hypothesis that it does. If the assessee gives an explanation which is unproved but not disproved i.e. it is not accepted but circumstances do not lead to the reasonable and positive inference that the assessee's case is false, the explanation cannot help the Department because there will be no material to show that the amount in question was the income of the assessee. This case is also covered by the decision of the Tribunal, Ahmedabad in the case of ACIT vs. Excel Forging (P) Ltd. in ITA No.1709/Ahd/2005 dated 26.12.2008 wherein it has b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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