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TMI Blog2012 (9) TMI 1241X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. Facts in brief as emerged from the corresponding penalty order passed u/s.271(1)(c) of the IT Act dated 29.3.2005 were that a search u/s.132 was conducted at the residence of the Director of the company on 5.10.1993. It was found that the assessee had received Rs.16,49,000/- as share application money . Those share-applicants were found to be agriculturist. The said share application money was taxed u/s.68 of IT Act. There was an another addition in respect of unsecured loan of Rs.35,35,000/- which was also taxed u/s.68 of IT Act. The third addition was disallowance of interest of Rs.20,106/-. On these three additions, impugned penalty of Rs.10 lacs was levied. 4. It is strange to note that the A.O. had noted a factual aspect in Paragraph Nos.4 and 5 while levying the impugned penalty about the deletion of addition of Rs.35 lacs; reproduced for ready reference:- 4. Again the assessee carried the assessment before the CIT(A)-I, Baroda. Vide his appellate order dtd. 14.01.2004, the CIT(A) has confirmed the addition of Rs.16,49,000/- on account of share application money and has directed the A.O. to give credit after verification of correctness of the figure of additi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e issues in the following manner:- (i) The addition u/s.68 of Rs.16,49,000/- being share application money was confirmed vide para 7.4 to para 7.10 by the Tribunal. (ii) In respect of addition u/s.68 of unsecured loans of Rs.35,35,000/- the matter was restored back to the file of the AO with certain directions. (iii) In respect of disallowance of Interest expenses of Rs.20,506/- the same was confirmed by the Tribunal. 7. We have heard both the sides. We have perused the orders of the authorities below. As far as the question of levy of penalty in respect of an addition pertaining to the share application money is concerned, we have been informed that the assessee has floated the shares in muffassil areas to promote the agency of the tractor, hence share application money from the agriculturist have been invited. In para 7.5, the Respected Co-ordinate Bench in the order cited supra dated 28.2.2012 has made an observation that the AO in his remand report had stated that certain details were furnished by the assessee although after the completion of the assessment proceedings. But it has also been noted in para 7.6 that during the course of hearing before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... j.), wherein it was held that in order to justify the levy of penalty there must be same circumstances leading to a reasonable conclusion that the amount does represent assessee s concealed income and that it is not enough that the amount has been assessed as income and further that the circumstances must show that there was animus concealment coupled with furnishing of inaccurate particulars on the part of the assessee; therefore we hereby hold that the ld.CIT(A) has rightly deleted the penalty. 7.1. As far as the addition of unsecured loan of Rs.35,35,000/- is concerned, since the Tribunal has already restored this issue back to the file of AO for afresh consideration and the assessee is also advised to furnish relevant documentary evidences, therefore at present the question of concealment is pre-mature and to be decided after the finalization of the quantum proceedings as per law. Next, the disallowance of interest expense of Rs.20,506/- was considered by the Respected Co-ordinate Bench as connected with the share application money , therefore on same lines we hereby hold that as far as the question of levy of concealment penalty is concerned, the same is not leviable on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces. Similar disallowance was made on repairs and bonus unpaid. But this do not call for levy of penalty, as the appellant has not deliberately filed any inaccurate particulars of its income and concealed its income. The appellant has given all the details called for and, therefore, penalty on these additions is not leviable. However, regarding addition of interest income not shown, it is found that the appellant had earned the interest income but not shown the same in its books of account and the A.O. is justified in levying penalty on this addition of Rs.1,26,022/-. For other cash credits of Rs.33,19,920/-, it is the appellant s onus to prove the identity, genuineness and credit worthiness. The appellant had not filed the confirmation and not proved the credit worthiness inspite of various opportunities given by the A.O. Even at the appellate stage, no further evidence is produced. Hence, it is held that the A.O. was justified in levying on this addition. The A.O. is, therefore, directed to recalculate the penalty amount by following the above directions. 13. As far as the result of the quantum addition was concerned for A.Y. 1994-95, the Tribunal in its consolidated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 28.2.2012 the issues in question, i.e. unexplained cash credit in respect of Nova Prefab Construction Pvt.Ltd. of Rs.30 lacs and Patco Ahmedabad of Rs.9,05,000/- have been restored back to the file of the AO with certain directions. From the side of the assessee a reliance has been placed on the decision of Vijay Power Generators Ltd. vs. ITO [2009]180 Taxmann 102 (Del.)[Mag.] for the legal proposition that while levying the penalty the A.O. must not merely rely upon the findings made during assessment proceedings but must independently examine the evidence adduced by the assessee. At the moment, we can say that these guidelines can be followed in respect of those amounts for which we have restored the issued of levy of penalty back to A.O. for afresh adjudication. We therefore hold that a consequential order in respect of concealment penalty is to be passed thereafter as per law. 15.1. We have noted that the impugned penalty order was in respect of total income of Rs.40,55,615/-. We have already dealt with the unexplained cash credits, however, we have yet to consider the remaining amount of disallowance of interest expense of Rs.1,50,218/- which was the subject matter of le ..... 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