Decided on December 21,1994



R.V. Easwar, Judicial Member - (1.) THIS is an appeal by the assessee and is directed against the order of the CIT(A) sustaining the penalty of Rs. 68,775 imposed under Section 271 (1)(c) of the Income-tax Act.
(2.) The assessee is a public limited company which came into existence during the year of account. It made a public issue of share capital and received contributions on account of share application money as well as allotment money. In the assessment proceedings the ITO noticed that the assessee received as share subscription a sum of Rs. 55,22,250. The assessee furnished a complete list of shareholders and also a copy of the respective accounts maintained by its bankers, namely, Canara Bank and Allahabad Bank through whom the amount was collected. The ITO scrutinised the list and observed that a sum of Rs. 1,23,000 was not received by means of account payee cheques but was received in cash. He called upon the assessee to explain the nature and source of the deposit in response to which the assessee contended that since the number of shareholders was more than 2200 it would not be possible for the company to produce confirmation from all of them. Subsequently, the assessee was able to furnish list of confirmation from most of the shareholders who deposited the money by means of cheques. In respect of the amount of Rs. 1,23,000 deposited in cash, the assessee was not able to furnish any confirmation but it was able to furnish the names of the subscribers, their addresses and the number of shares subscribed by them. Their income-tax file numbers could not be given on the ground that there was no information in this regard. The ITO from those facts concluded that the assessee was not able to establish the creditworthiness of the parties who deposited Rs. 1,23,000. The amount was accordingly treated as the assessee's income from undisclosed sources and was added under the head 'Other sources'. There was an appeal against the addition to the CIT(A). The CIT(A) very briefly dealt with the addition. He was of the view that the assessee could not furnish anything regarding the identity or creditworthiness of the subscribers. He, therefore, confirmed the addition.
(3.) THERE was no further appeal by the assessee against the order of the CIT(A). In other words the addition was accepted by the assessee.;

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