Behari Lal, A.M.: - (1.) THIS appeal has been directed against the order of Commissioner (Appeals)-II, Rajkot, dated 19-12-1994, for the assessment year 1992-93.
(2.) The only ground of appeal is regarding the addition of Rs. 1,00,250. It is submitted that the learned Commissioner (Appeals) erred in law in refusing to admit the evidence in the form of conformation which could not be produced during the assessment proceedings due to circumstances beyond the control of the assessee. The assessee is a partnership firm engaged in the business of execution of contracts of the State Government and Semi-Government bodies. The return of income was filed on 6-7-1992, declaring the total income of Rs. 54,859. The assessing officer made an addition of Rs. 1,00,250 to the returned income in his order passed under section 143(3) of the Act. The learned Commissioner (Appeals) confirmed the addition made by the assessing officer had dismissed the appeal.
(3.) THE assessing officer in his order has stated that the assessee-firm took deposits of Rs. 1,82,000 from various persons. THE assessee filed the confirmation of the cash credits of Rs. 81,750 only. However, the assessee could not file confirmations of the remaining cash credits of Rs. 1,00,250. During the course of assessment proceedings, the assessee-firm made the written submissions wherein the assessee has stated as follows : "Considerable time has elapsed since the beginning of the case. Despite your repeated requests, we are unable to prove the cash credits received from the above 6 persons. Since, we want our case to be completed and to buy mental peace, we hereby offer to add the amount of Rs. 1,00,250 being the sum of amount credited in our books of account in the names of the above six persons referred to herein above." However, the assessee also stated that the penalty proceedings should not be initiated against the assessee-firm. It is further stated that the assessee agreed for addition of Rs. 1,00,250 to buy peace of mind. THE assessing officer, however, initiated the penalty proceedings under section 271(1)(c) of the Act, in the assessment order.;