9911796707
TMI Blog1983 (2) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... from other sources on account of unproved cash credits : Shri Sant Singh 1,000 Shri Kewal Singh 1,000 Shri Gulzar Singh 2,000 Shri Khushi Ram 5,000 9,000 Addition in the name of Phulka Rice Mills, Sirhind 9,390 ------------- 26,134 ------------- 3. The assessee aggrieved by the said assessment order went in appeal before the AAC. The AAC vide his order dated 31-10-1977 reduced the trading addition to Rs. 5,000 but confirmed the rest of the additions. When the matter came before the Tribunal, the Tribunal deleted even the addition of Rs. 5,000 sustained by the AAC in trading account. 4. The ITO on 17-3-1977 with the original notice of demand issued a penalty notice under section 271(1)(c) read with section 274 of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us. He argued at length that even explanations are not given for the cash credits in course of penalty proceedings. He submitted that contention of the assessee that due to business expediency the creditors could not be produced, is a contention which will lead to strange consequences. He also placed his reliance on CIT v. M. Habibullah [1982] 10 Taxman 216 (All.). The learned counsel for the assessee, on the other hand, submitted that the ITO never invoked the Explanation. He took us once again through the finding of the Tribunal in quantum appeals and placed his reliance on the Calcutta High Court judgments in the cases of CIT v. Bhuramal Manikchand [1981] 130 ITR 129 and CIT v. Bhuramal Manickchand [1980] 121 ITR 840. He submitted that o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when the return is filed is to apply, he placed his reliance on the case of Brij Mohan v. CIT [1979] 120 ITR 1 (SC). Regarding onus, he took us through certain pages of the assessee's compilation, page 26 being the affidavit of Khushi Ram, page 30 being the copy of account of Sirhind Branch. He vehemently argued that section 68 of the Act is for unproved cash credits and not for penalty. 6. The learned departmental representative in the rejoinder submitted that no plea can be taken as done by the learned counsel for the assessee and in that support he relied on CIT v. Raman Industries [1980] 121 ITR 405 (Punj. Har.). Regarding the fact that the ITO did not give any finding regarding application of the Explanation, he again relied on Vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nding on that date and provisions and clauses given therein did not authorise the ITO to levy the penalty in cases where concealed income was more than Rs. 25,000. There is also no controversy about the fact that the concealed income taken into consideration by the ITO amounted to Rs. 7,744+9,000+9,320, i.e., Rs. 26,064 which is apparently more than Rs. 25,000. Their Lordships of the Hon'ble Supreme Court in the case of Brij Mohan, have clearly said that law applicable is the law operating on the date when return is filed and this has been the consistent view of this Bench in many cases. This may be a new plea taken by the learned counsel for the assessee but this is one in which no new facts are required to be gone into nor it contemplated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Habibullah because in the instant case we are not ignoring the application of the Explanation but we are cancelling the penalty on different ground whatsoever. 9. Similarly, reliance of the learned departmental representative on the case of Shiv Narain Khanna is misplaced. In that case, their Lordships held that material on which assessment is based can also form basis for penalty. We are intentionally not discussing the catena of cases relied upon by the learned counsel for the assessee in support of his contention regarding onus, applicability of the Explanation and whether what is enough for assessment is enough for penalty because the assessee succeeds on the ground that the penalty is bad because it was levied by the ITO when he w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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