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TMI Blog2019 (5) TMI 739X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst the order of the ITAT, appeal of the assessee stands admitted before the Hon ble High Court. It is settled position of law that when the evidences and explanation furnished by the assessee in support of cash credits are not acceptable by the department, then addition u/s 68 can be made, but penalty u/s 271(1)(c) is not automatic. Thus, from the material available on record, we are of the view that the explanation of the assessee was not found to be false, but it could not be accepted on account of substantiation of his claim with help of some solid evidences. Therefore, it is not a fit case for visiting the assessee with penalty. We allow the appeal of the assessee - ITA No. 2485/Ahd/2018 - - - Dated:- 7-5-2019 - Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ends and relatives for financing his son s USA visa. The assessee has furnished details of lenders with supporting evidences. Statement of the lenders have also recorded by the AO and they confirmed advancing of loan to the assessee; they also produced form no. 7/12 to show earning of income from agriculture produce. However, the ld.AO did not accept the contentions of the assessee and imposed penalty under section 271(1)(c) by rejecting confirmations filed by the depositors on the ground that depositors were not capable of advancing such sum. He imposed penalty of ₹ 2,94,895/-. Appeal before the ld.CIT(A) did not bring any relief to the assessee, hence, assessee is now before the Tribunal. 4. Before us, the ld.counse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... offer an explanation or offers an explanation which is found by the Assessing Officer or the Commissioner (Appeals) or the CIT to be false, or (B) such person offers an explanation which he is not able to substantiate and fails to prove that such explanation is bona fide and that all the facts relating to the same and material to the computation of his total income have 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. 6. A bare perusal of this section would reveal that for visiting any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee had disclosed all the facts relating to the same and material to the computation of the total income. Under first situation, the deeming fiction would come to play if the assessee failed to give any explanation with respect to any fact material to the computation of total income or by action of the Assessing Officer or the Learned CIT(Appeals) by giving a categorical finding to the effect 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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