9911796707
TMI Blog2010 (4) TMI 1233X X X X Extracts X X X X X X X X Extracts X X X X ..... e received following amounts towards share capital and unsecured loans from various persons detailed as under:- Sr. No. Particulars Share capital Unsecured loan Total 1 NRIs. 45,50,000 9,80,000 55,30,000 2 Assessees 20,84,500 17,36,700 38,21,200 3 Agriculturists 1,00,000 6,17,000 7,17,000 4 Non-assessees 17,17,500 24,97,100 42,14,600 ------------- ------------- ------------ 84,52,000 58,30,800 1,42,82,800 ------------- ------------- ------------ To a query by the AO, seeking list of share-hold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ii) Shri Saukat Amin Saiyed 5,00,000 4,00,000 1,00,000 iii) Shri Mohmedali A Saiyed 3,25,000 2,00,000 1,25,000 iv) Shri Ayub Y Saiyed 18,300 - 18,300 v) Shri Hanif Y Saiyed 90,000 - 90,000 15,52,200 = 11,00,000 + 4,52,200 2.2 As regards following amounts stated to have been brought in by agriculturalists Sr. No. Name of person Share capital Loans Total Sources (own funds) 1 Mr.Yasin Hussain Saiyed 1,00,000 1,25,000 225000 Agri. income 2 Mr. Sharif Jamal Nil 2,00,000 200000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uine. As regards the remaining persons, despite sufficient opportunity allowed to the assessee, they were not produced for cross verification. Confirmatory letters filed by the assessee-company in respect of these persons could also not be verified. The AO further observed that many of the confirmatory letters filed by the assessee were accompanied by written notes, which revealed that the investments were made by these persons after taking loans or gifts from some other persons, whose identity was also not established. The written notes were stereotyped and signed by persons whose address was not given nor any other supporting evidence to prove the genuineness of transactions. The terms and conditions on which loans were given, were also not explained in any of the said notes. In these circumstances, the investment of Rs.42,14,688/- made by these persons was added u/s 68 of the Act. Inter alia, penalty proceedings u/s 271(1)(c) of the Act were also initiated for the aforesaid unexplained investment. 3 On appeal, the ld.CIT(A)vide order dated 03-10-1996 deleted three additions of Rs. 4,52,200,Rs. 7,17,000 Rs.42,14,600,inter alia, on the ground that this was first year of the bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19000 54. Dineshbhai K Ahair 19000 56. Yusuf Saiyed 19000 57. Vasimbhai Shaikh 19550 836550 After verification, the AO concluded that the assessee proved the genuineness of some of the aforesaid share applicants assessed to tax while the others, who were not assessed to tax ,the assessee established their credit worthiness and mode of transactions. Accordingly, the AO reduced the addition to Rs.33,78,138/- [42,14,600 8,36,550],the assessee having failed to establish the genuineness of transactions and creditworthiness of Sajid Salim Saiyed(Rs. 3,00,000/-),Jahid Hanif Saiyed(Rs.1,15,000/-),Mehmood Amin Saiyed (Rs.2,10,000/-) Ramjan Ayub Saiyed(Rs.1,70,000/-), who were minors and not assessed to tax nor the assessee submitted any evidence about sources of their income oreven in respect of their income having been taxed in the hands of their guardians. Further ,on examination of the ladies Smt. Sehwaz Saukat Saiyed(Rs.2,17,500/-),Smt. Kuls ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edits and share deposits. In reassessment this addition has been brought down to Rs.40,51,138/-. 4.1 The case in appeal is represented by Shri V.V.Bhagal, Advocate. Shri Bhagat has filed a letter before me conceding an addition of Rs.7,95,000/- representing the following: Sajid Salim Saiyed Rs. 3,00,000/- Vahid Hanif Saiyed Rs. 1,15,000/- Mehmoob AminSaiycd Rs. 2,10,000/- Rajman Ayub Saiyed Rs. 17,000/- ----------------- Rs. 7,95,000/- These share applicants were minor at the lime the shares were shown Io have been purchased. No evidence at all was filed in support of their genuineness. After considering these additions which are now admitted as non-genuine, the disputed additions work out to Rs.32,37,050/- [Rs.6,73,000 + Rs.25,64,050]. 4.2 Shri Bhagat further submits as follows vide his letter dated 07-122004: The details regarding the present position of share holders creditors are yet t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A No.3933/Ahd/2004, restored the matter back to the file of the ld. CIT(A) with the following observations:- 6. The ld. AR submitted that the CIT(A) has not considered all facts. The CIT(A) did not provide sufficient opportunity of hearing. The AR drew our attention on assessee's letter dated 7-12-2004 which has been reproduced by the CIT(A) in his order as under:- Shri Bhagat further submits as follows vide his letter dated 7-122004: The details regarding the present position of share holders creditors are yet to be worked out. This could not be worked out as there was a occasion of marriage in family of directors. 7. The ld. AR further submitted that a discretion has been conferred on the A.O. under Section 69 of the Act to treat the source of investment as the income of the assessee if the explanation offered by the assessee is not found satisfactory and the said discretion has to be exercised keeping in view the facts and circumstances of the particular case. The ld. AR in support of his contention relied upon the judgement of Apex Court in the case of CIT Vs.S;m.P.K.Noorjahan 237 JTR 570 (SC). The ld. AR has also relied upon the decision of the G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cide the matter a fresh in accordance with law after providing reasonable opportunity of hearing to both sides. 8 In pursuance to the aforesaid directions of the ITAT, the CIT(A) in the impugned order concluded in the following terms: 2. In response to the notice of hearing, Shri V. V. Bhagat, Advocate attended and filed written submission which is placed on record. The case is discussed with him. 3. The only issue raised before the Hon'ble ITAT and the contention raised by the appellant are such that the share deposits and loans taken by the appellant company are genuine and CIT(A) ought to have accepted the same. The essence of the contention is narrated below: Out of total addition of shares deposits and loans of Rs.6,73,000/-- + Rs.33,78,138/- = 40,51,138/-, Rs.7,95,000/- has been conceded by your appellant at C1T(A) stage and hence the addition of Rs.6,75,000/- + Rs.25,83,138/- = Rs.32,56,138/- is in dispute. For various reasons and based on evidences produced before the ACIT and CIT(A), the share deposits and loans are genuine and therefore the addition of Rs.32,56,138/- made u/s. 68 and remaining in dispute may be allowed. 4. Sin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the instant case the appellant has failed to discharge his onus. In that case it would not be unfair to conclude that the appellant has failed to prove that the unexplained loans/share deposits are genuine. There is no merit in the appellant's argument that the depositors now refused to give details as they think it is a private matter. Looking to the totality of facts the AO has rightly recommended in the remand report to uphold the addition after placing her reliance on the decision of Hon'ble Courts where in a ratio has been laid down that, it is for the assessee to establish the genuineness of all the depots in his books. Hon'ble Gujarat High Court in the case of Bomin P. Ltd. V/S. OIT 160 ITR 477 has ruled out that that section 68 enjoins the assessee to offer an explanation about nature and source of any sum found credited in the books of accounts for any previous year. And if there is no explanation or if the explanation is unsatisfactory in the opinion of assessing officer, the sum so credited is to be treated as income and brought to tax accordingly. The assessee has to prove the identity of the creditor, credit worthiness of the creditor and genuinenes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the impugned order of the ld. CIT(A) contended that the ITAT had restored the issue to the file of the CIT(A) on the plea of the assessee that details regarding the present position of the shareholders and creditors could not be submitted due to the marriage in the family of the directors. Since the assessee did not furnish any further details, there was no ground for interference with the findings of the CIT(A). While referring to the decision of the Hon ble Gujarat High Court in the case of Bomin P. Ltd. vs. CIT (1986) 160 ITR 477 (Guj), C. Kant Co. vs. CIT (1980) 126 ITR 63 (Cal) and Addl. CIT vs. Hanuman Agarwal (1985) 151 ITR 150 (Pat), the learned DR contended that the assessee having failed to establish the creditworthiness of any of the depositors, the addition upheld by the CIT(A) should be sustained, especially when no new facts have been brought to the notice of the CIT(A).In his rejoinder, the learned AR contended that this being the first year of the operations of the company, no addition could have been made u/s 68 of the Act since all the relevant details and confirmations were duly filed before the AO as pointed out in reply of the assessee placed at pages 220 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further enquiries can be made by the AO himself, both in regard to the nature and the source of the sum credited by the assessee in its books of account, since the wording of s. 68 is very wide. The Full Bench opined that- If the shareholders exist then, possibly, no further enquiry need be made. But if the ITO finds that the alleged shareholders do not exist then, in effect, it would mean that there is no valid issuance of share capital. Shares cannot be issued in the name of non-existing persons........ If the shareholders are identified and it is established that they have invested money in the purchase of shares then the amount received by the company would be regarded as a capital receipt but if the assessee offers no explanation at all or the explanation offered is not satisfactory then, the provisions of s. 68 may be invoked . It is apparent that the Court had not reflected upon the question as to whether the burden of proof rested entirely on the assessee, and at which point, if any, this burden could justifiably be shifted to the AO. The Full Bench, in fact ,clarified that they were not deciding as to whom and to what extent is the onus to show that an amount credited in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce with facts brought to our notice by the respective parties and as we understood on perusal of the relevant documents in the paper book submitted before us. As is apparent from the confirmations of the respective parties, only an amount of Rs. 3 lacs out of Rs. 8,55,500 Rs. 7.12 lacs out of Rs. 17,27,500 is towards share capital. In these facts and circumstances, in the light of view taken in the aforesaid decisions by the Hon ble Apex Court, ,especially when the existence of aforesaid shareholders has not been doubted, we have no alternative but to vacate the findings of learned CIT(A) and delete the aforesaid additions on account of share capital . 10.2 As regards the aforesaid remaining addition of Rs.5,73,000/-, we find that the this amount comprises loan amounts in the names of following persons: 1. Yasin Hussain Saiyed Rs.1,25,000 2. Sharif Jamal Rs.2,00,000 3. Yunus Sharif Rs.1,39,000 4. Ayub Mohid Husain Rs. 69,000 5. Ami ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 200000 187 to 199 8 Miss. Firdos Ayub Saiyed 140000 200 to 205 9 Smt. Aklima Hanif Saiyed 140000 206 to 217 1727500 Even though the ld. AR stated that the said amount is on account of unsecured loans, we find from their confirmations placed in the paper book that an amount of Rs. 7.12 lacs has been attributed to share capital while remaining amount of Rs.10,15,500/- is on account of unsecured loans. 10.5 The ld. AR argued that this being the first year of operations of the company and turnover being only Rs. 88,000/-, addition on account of share capital or unsecured loans,having recourse to provisions of sec. 68 was not justified, inter alia, in the light of view taken by the Hon ble Gujrat High Court in Mitesh Rolling Mills P. Ltd.(supra). We find that despite directions of the ITAT in their order dated 3.3.2006, the ld. CIT(A) without adverting to the aforesaid deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no material to show that share application money or for that matter unsecured loans in the name of persons whose confirmations were submitted before the AO were of the assessee-company. The fact that some of the investors got the pay orders and loans from different persons, is a matter for enquiry in the hands of the said investors and not in the case of the assesseecompany. Similarly, the discrepancies found in the account of some of investors is a cause to make enquiry in their cases. Further, the fact that all the unsecured loans from the creditors, whose confirmations were filed before the AO were received by the assessee before the commencement of the business or immediately thereafter, has not been disputed by the Revenue. In CIT v. Bharat Engineering and Construction Co. [1972] 83 ITR 187 , the assessee was an engineering construction company, which commenced its business in May, 1943 but there were several cash credit entries in the first year of its business amounting to Rs. 2.5 lakhs The assessee was called upon to explain such credit entries. The explanation of the assessee did not find favour with the AO, the CIT(A) nor the Tribunal. However, the Tribunal deleted the ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee fail to rebut the said evidence, the same can be used against the assessee by holding that it was a receipt of an income nature. In the case in hand, the authorities concurrently found the explanation offered by the assessee unacceptable. The ld. CIT(A) upheld the opinion formed by the Assessing Officer that the explanation offered was not satisfactory. 10.53 In the light of observations of the Hon ble jurisdictional High Court in Mitesh Rolling Mills P Ltd. vs. CIT,258 ITR 278(Guj), as extracted in the order dated 3.3.2006, which the ld. CIT(A) did not even consider in the impugned order despite specific directions, as also in the light of observations of the Apex Court in Smt. P. K. Noorjahan's case [1999] 237 ITR 570 (SC) and CIT v. Bharat Engineering and Construction Co. [1972] 83 ITR 187 (SC), we are of the opinion that although as a legal proposition, the provisions of the s. 68 do apply to each and every credit entry in the books of account to be maintained but the explanation of the assessee has to be considered depending on the facts and circumstances of each case in their entirety. Where source for the credit is identified by the assessee, however, the sati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) has erred in law and on facts in confirming penalty levied u/s 271(1)(c) by AO of Rs.23,29,404/- on the addition of cash credit u/s 68 of the Act that is wholly unsustainable in law and on facts and as such when the Appellant has discharged the onus of having established the genuineness of the transaction by submitting the identity and confirmation of the depositors. Both the lower authorities have failed to appreciate the fact that the Appellant has neither furnished inaccurate particulars nor concealed any income and held that simply because addition is sustained, penalty is leviable. The penalty levied being without any merits and justification requires to be quashed. 16. Facts, in brief, have already been narrated in the quantum appeal as aforesaid. While completing the assessment vide order dated 29.1.2004 , the AO added the following two amounts u/s 68 of the Act:- 1. Investment in Share Capital by the Agriculturists not treated as genuine Rs.673000/- 2. Investment in Share Capital by others treated as cash credit Rs.3378138/- Rs.4051138/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ders for an amount of Rs.8,55,550/- could not be produced in person as 13 years had elapsed. Since the deposits were confirmed, there was no room for penalty of Rs.23,29,404/- and the same may be deleted, the assessee pleaded.However, the ld. CIT(A) rejected the contentions of the assessee, in the following terms: 5.3 It is obvious from the above that even when the opportunity given at the remand report stage, the appellant has nothing new to offer by way of evidence except what has already been filed during the original assessment proceedings which were rejected after detailed examination by the then assessing officer. The AO has rightly pointed out that the appellant's plea that it is a matter that is 13 years old and therefore, he does not have the relevant information is an insupportable argument as the onus to prove the genuineness of the unexplained loans/share deposits is upon the appellant. It is quite clear that the onus to prove its case is upon the appellant as the appellant is in appeal and not the department. Therefore, in the instant case the appellant had failed to discharge his onus. In that case it would not be unfair to conclude that the appellant has fai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... depositors. The AR further argued that it is not open to the AO to levy penalty only because addition is sustained. The AR also argued that the AO should have proved positive act or deliberate act of biding or holding something back. Merely because the cash credits are disbelieved, no penalty can be imposed. The AO should have brought out on record that the appellant's own unaccounted monies were introduced in the guise of Cash credits and Share deposits. The AR argued that the AO has not appreciated these facts and imposed penalty. Penalty can not be imposed only because it is lawful to do so. According to the AR it is a matter of believing or not believing the explanation offered by the appellant and not adducing any evidences against the appellant. The AR contended that the appellant's case is not a fit case for levying the concealment penalty as the matter involves appreciation or otherwise of the evidences filed and placed on record. 5.7 I have considered the arguments of the appellant as well as the observation of the AO in the penalty order. On the basis of the above factual matrix of the case, I am of the considered view that the AO is justified in imposing p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case as also the decisions relied upon. At the outset, we may point out that in an appeal against quantum addition in ITA no 1544/Ahd./2007, we have reduced the addition of Rs. 32,56,138 /- to Rs.2,08,000/- ,since in respect of the amount of Rs. 1,39,000/- in the name of Yunus Sharif Rs. 69,000/- in the name of Ayub Mohid Husain, their confirmations or even date when amount was brought in or nature of receipt and any material/evidence in respect of sources of the amount have not been placed before us. In these circumstances, since the addition to the extent of Rs.30,48,138, forming the basis for levy of penalty, has been deleted by us vide our aforesaid order, penalty levied by the AO does not survive in relation to the said amount. Hon ble Delhi High Court in the case of CIT Vs. R.Dalmia,(1992)107 Taxation 107, held that no penalty survives after deletion of additions, forming the basis for the levy of penalty. Hon ble Supreme Court in the case of K.C.Builders Vs. ACIT,265 ITR 562(SC) held that ordinarily, penalty cannot stand if the assessment itself is set aside. Where an order of assessment or reassessment on the basis of which penalty has been levied on the assessee, ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd K.P.Madhusudanan vs. CIT,251 ITR 99(SC), it is well established that whenever there is difference between the returned and assessed income, there is inference of concealment. The explanation 1 to sec. 271(1)(c) of the Act raises a presumption that can be rebutted by the assessee with reference to facts of the case. Thus, the onus is on the assessee to rebut the inference of concealment. The absence of explanation itself would attract penalty. The explanation offered by the assessee should not be false. The onus laid down upon the assessee to rebut the presumption raised under explanation 1 would not be discharged by any fantastic or fanciful explanation. It is not the law that any and every explanation has to be accepted while mere offer of income by the assessee can not justify cancellation of penalty. Undisputedly, no cogent explanation has been given on account of difference of Rs. 7,95,000+ 2,08,000=10,03,000/- between the returned and assessed income and thus, onus laid down upon the assessee in terms of explanation 1 to sec. 271(1)(c) of the Act remains undischarged. Even other wise explanation of the assessee during the assessment proceedings that the amount of deposit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see aware that the provisions thereof are to be used against him. These provisions include the Explanation. By reason of the Explanation, where the total income returned by the assessee is less than 80 per cent. of the total income assessed under section 143 or 144 or 147, reduced to the extent therein provided, the assessee is deemed to have concealed the particulars of his income or furnished inaccurate particulars thereof, unless he proves that the failure to return the correct income did not arise from any fraud or neglect on his part. The assessee is, therefore, by virtue of the notice under section 271 put to notice that if he does not prove, in the circumstances stated in the Explanation,, that his failure to return his correct income was not due to fraud or neglect, he shall be deemed to have concealed the particulars of his income or furnished inaccurate particulars thereof and, consequently, be liable to the penalty provided by that section. No express invocation of the Explanation to section 271 in the notice under section 271 is, in our view, necessary before the provisions of the Explanation therein are applied. The High Court at Bombay was, therefore, in error in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will represent the concealed income of the assessee, provided no explanation is furnished or the explanation furnished is found to be false or the assessee is not able to substantiate the explanation or the explanation is not bona fide. 21.5 In the instant case ,since the assessee failed to establish the source of the aforesaid amount of Rs. 7,95,000/- and accordingly surrendered the amount after more than 10 years of filing of the return while in respect of amount of Rs. 2,08,000/,the assessee failed to substantiate their explanation during the assessment proceedings and even during penalty proceedings and the addition having been sustained by us,apparently, explanation 1 to sec. 271(1)(c) is attracted and the assessee has failed to discharge the onus laid down under this explanation. 21.6 In the case of CIT v. Ganpatrai Gajanand [1977] 108 ITR 403 (Ori.), the Assessing Officer added a sum found credited in the books of the assessee to this income by rejecting the explanation of the assessee unsatisfactory. The Assessing Officer also imposed penalty under section 271(1)(c). The Orissa High Court held that there is no distinction between the income arising on account of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ders to be false, or (c) the assessee offers an explanation but no material or evidence to substantiate it, he shall be deemed to have concealed such income within the meaning of section 271(1)(c). What sections 68, 69, 69A and 69C deem for the purpose of assessment was injected for the purpose of the penalty by operation of a deemed provision. A proviso was added to the new Explanation. It concerns cases where the assessee offers an explanation which he is not able to substantiate. Consequently, the provision intended to save such amount from imposition of penalty, although the same had been added to the assessee's explanation is found to be bona fide and all facts relating to the same and material to the computation of his total income have been disclosed by him. Their Lordships further held at pages 648 to 650 as under: A conspectus of the Explanation added by the Finance Act, 1964, and the subsequent substituted Explanation makes it clear that the statute visualised the assessment proceedings and penalty proceedings to be whole distinct and independent of each other. In essence, the Explanation (both after 1964 and 1976) is a rule of evidence. Presumptions which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee has discharged the onus, it becomes a conclusion of fact, and no question of law arises. As observed earlier, the initial burden is on the assessee. Once the initial burden is discharged, the assessee would be out of the mischief unless further evidence is adduced. It is plain on principle that it is not the law that the moment any fantastic or unacceptable explanation is offered, the burden placed would be discharged and the presumption rebutted. As pointed out by the Apex Court in Mussadilal Ram Bharose (165 ITR 14) the burden placed upon the assessee is not discharged by any fantastic explanation. It must be an explanation acceptable to the fact-finding body. The position on and after April 1, 1976 is clear that where, in respect of any item of credit, the assessee had offered an explanation which the taxing officer has considered to be false or the assessee has offered an explanation but not material or evidence to substantiate it, he shall be deemed to have concealed such income within the meaning of section 271(1)(c). A further condition was imposed with effect from September 10, 1986, with which we are not concerned. In the case at hand, the explanatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion Laws (Amendment) Act, 1975, w.e.f. 1-4-1976. 21.10 Hon ble Allahabad High court held in the case of Sangam Enterprises Vs. CIT,288 ITR 396(All) that Having given our anxious consideration to the contention raised by Shri Mahajan, we find that after the insertion of Explanation 1 to section 271(1)(c) of the Act by the Taxation Laws (Amendment) Act, 1975, if the explanation offered by the assessee regarding the additions is either found to be false and remained unsubstantiated, the additions so made are deemed to be the concealed income, and therefore, the penalty provisions are attracted. The decision relied upon by the Tribunal relates to the assessment years prior to April 1, 1976, when the present Explanation was not in the statute book, and, therefore, they are not applicable in the present case. We are therefore, of the considered opinion that the Tribunal has completely misdirected itself in cancelling the penalty. 21.11 As regards reliance on decision in the case of National Textiles vs Commissioner Of Income-Tax, 249 ITR 125(Guj) on behalf of the assessee, the said decision related to AY 1974-75,before insertion of explanation 1 to sec 271(1)(c) of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of CIT v. Nathulal Agarwala and Sons [1985] 153 ITR 292: The Patna High Court emphasised that as to the nature of the explanation to be rendered by the assessee, it was plain on principle that it was not the law that the moment any fantastic or unacceptable explanation was given, the burden placed upon him would be discharged and the presumption rebutted we agree. We further agree that it is not the law that any and every explanation by the assessee must be accepted. It must be an acceptable explanation, acceptable to a factfinding body. We are aware that it would not be possible for the High Court to enter into a factfinding exercise or reappreciate the evidence and we do not propose to do so. However, at the same time, it is apparent that the burden which is cast on the assessee remains undischarged when one applies the principles laid down by the apex court. As observed, the explanation has to be one which is not fantastic or unacceptable. It is not the law that any and every explanation by the assessee must be accepted. . 21.13. In Commissioner Of Income-Tax. vs Vidyagauri Natwarlal And Others.,238 ITR 91(Guj),Hon ble jurisdictional High Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e stage the alleged disclosure has taken place and not stop at that stage and close the inquiry at the threshold on the abstract principle that mere rejection of explanation does not result into levy of penalty. The Tribunal has obviously erred in stopping at that stage and not considering the material before it on the basis of which the authority levying penalty has come to a positive finding as noticed by us. The assessee before us has not disclosed the address of the depositors during the course of assessment proceedings and during the course of penalty proceedings. In the absence of details of creditors and other facts to prove the genuineness of the deposits, the onus lies on the assessee. As per Explanation 1 to section 271(1)(c), the onus is not discharged by the assessee. The burden lies on the assessee is not discharged by convincing explanation nor it is law that any explanation by the assessee must be accepted. We, therefore, confirm the order of the CIT (Appeals) insofar as concealment of income of Rs. 1,02,000. 21.14 In the instant case also the assessee having failed to discharge the onus, surrendered an amount of Rs. 7,95,000/- after ten years of filing o ..... 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