Khatau Makhanji Spinning & Weaving ... vs Dcit Cir 2(2)(1), Mumbai on 3 August, 2018
In the case of DCIT vs. K. Bhanji Vanmalidas &
Co. (supra), it is observed by the Tribunal in para 6 that although it is true
that majority of the cash credits were not acceptable even to the Tribunal,
this alone cannot be the foundation for holding the assessee guilty of
concealment. The Tribunal further noted that the assessee has reasonably
explained that the addition was made and confirmed as the assessee could
not discharge the primary onus which lay on it under the law. The Tribunal
further observed that the various evidences submitted by it were not
considered as sufficient to prove the cash credit and avoid the deeming fiction
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provided in section 68 of the Act. Thereafter, the finding is given that there is
nothing on record to prove that the addition represents the concealed income
and that the same is consciously concealed. After making these observations,
the I.T.A.T. deleted the penalty in that case. We also find that in the present
case also, the assessee has submitted confirmation. In the present case also,
the assessee could not prove ingredients of section 68 in respect of these two
loans but the explanation of the assessee could not be disproved also by the
Revenue. Under these facts, we are of the considered opinion that although
the addition is finalized but penalty is not justified because the assessee has
submitted explanation regarding these cash credits and the same could not be
established to be non bonafide and therefore, in our considered opinion, the
penalty is not justified. We delete the same.