TARUN AGARWALA, J. - (1.) THE present appeal has been filed by the department under Section 260A of the Income Income Tax Act, 1961 (hereinafter referred to as the Act). The appeal was admitted on the following substantial questions of law: "1. W hether the ITAT was justified in deleting the penalty imposed u/s 271(1) (C) on the grounds that reasons for imposition of penalty are different when in fact they are one and the same. 2.W hether the ITAT was justified in deleting the penalty imposed u/s 271(1) (C on technical grounds, ignoring both the orders of assessment and penalty. 3. W hether the ITAT was justified in deleting the penalty imposed u/s 271(1) (C) ignoring the provision/language Section 273(B) which provides for exception to levy of penalty, and apart from the exceptions provided no other ground can be held to be a valid ground for deletion of penalty. 4. W hether in facts and circumstances of the case the Hon'ble ITAT was correct in setting aside the orders of Revenue authorities and cancelling the direction of Ltd. CIT(A) for levying the penalty being 100% of tax of Rs. 35,03,011/ - under Section 271(1)(C) of the Income Tax Act, 1961 by holding that A.O. has levied penalty on different reason than the reason given in assessment order while recording satisfaction and while issuing show cause notice, whereas the A.O. had levied penalty on the same reason given in assessment order while recording satisfaction and while issuing show cause notice."
(2.) THE facts leading to the filing of appeal is, that the assessee is a company deriving its income from cold storage for the assessment year 2003 -04. The assessee filed his return along with the audited copy of balance sheet and profit and loss account. The assessee was given a notice under Section 142(1) of the Act requiring to file relevant information and evidence such as books of accounts. Since the assessee did not comply with the terms of notice, the Assessing Officer proceeded under Section 144A of the Act and made an ex -parte best judgment assessment. Apart from various additions, the relevant additions made by the Assessment Officer was an amount of Rs. 26,33,328/ -, which related to the advance given by the farmers to the assessee and a sum of Rs. 35,03,011/ -, which was towards loans given by various persons.
(3.) ON the addition of Rs. 26,33,328/ - the Assessing Officer held: "From above reply, it is clear that the amount of Rs. 26,33,328/ - was the advance rent received from the farmers. It does not change that fact that advances so received are credit appearing in the books as per balance sheet of the assessee. It is well settled law that under section 68, the credits of loans as well as the credits of business transaction are to be proved in the same manner. The assessee has to file documentary evidence or sufficient materials on record to prove the identity creditworthiness and genuineness of transaction in respect of credits of advance rent received from each farmers. In response to notice, the assessee told the theory only. No evidence has been placed on record by the assessee to prove each advance received from farmers as required by notice under section 142(1) as above." On the addition of Rs. 35,03,011/ - the Assessing Officer held: "From the bank statements of account no. 01050/040104 maintained with State Bank of India Hathras, it has been transpired that the assessee deposited bank drafts amounting to Rs. 35,03,011/ -. No account books were produced to examine the nature and source of these drafts nor the Ld. Addl. Commissioner of Income -tax Range -3, Etah issued the directions under section 144A on this issue, therefore, the amount of drafts amounting to Rs. 35,03,011/ - is added in the total income under section 69 of the Income -tax Act, 1961." ;