RAJESH BALIA,J. - (1.) HEARD learned counsel for the appellant. The appellant has sought to challenge the order passed by the Tribunal sustaining the levy of penalty under S. 271(1)(c) of the IT Act, 1961 (for short 'the Act, of 1961') in respect of additions made in the income of the appellant as a result of cash found in his possession, source of which was not explained to the satisfaction of the assessing authority.
(2.) THE facts relevant for the present purposes, which need to be noticed are that the assessee was found in possession of a sum of Rs. 2,30,000 during the previous year relevant to asst. year 1990 91 by the customs authorities. The statement of assessee was recorded by the customs authorities on 24th May, 1989, in which the assessee admitted the said amount to be his own, which he has acquired by indulging in purchase and sale of contraband gold. The said amount was handed over to the IT authorities under S. 132A of the IT Act, 1961, for taking proceedings in that regard under the IT Act. This led to assessment of the said sum in the hands of the assessee by rejecting his explanation by invoking of deeming provisions under S. 69A of the Act of 1961, by treating the assessee to be owner of the amount found in his possession and the same having not been explained, to be income of the assessee of the previous year during which he was found to be in possession of the said amount. The additions made of Rs. 2,30,000 in the income of the assessee over and above returned by the assessee in pursuance of notice led to initiation of proceedings under S. 271(1)(c) of levying penalty for concealment of the particulars of the income by the assessee. The assessee furnished explanation that the said amount of S. 2,30,000 represented amount given to him by some third parties, which has also been confirmed by the third party named by the assessee. However, the assessing authority rejected the said explanation, in view of his admission before the customs authorities on 24th May, 1989, admitting it to be his income by rejecting the explanation of the assessee. The penalty proceedings were also terminated (sic) by holding the assessee guilty of concealing the particulars of such income and the penalty in a sum of Rs. 1,05,208 was levied. The said order has been affirmed by the Tribunal, after CIT(A) has dismissed the assessee's appeal. Learned counsel for the assessee contends that the assessee having furnished explanation and produced the relevant evidence of the persons, to whom he attributed the source of fund found in his possession, he has discharged his burden and thereafter he could not have been held liable for levy of penalty by invoking the provisions of S. 69A of the Act of 1961 nor he could be held responsible by relying on the provisions of Expln. 1 to S. 271(1)(c) because the assessing authority has not invoked the same for initiating the penalty proceedings.
(3.) HAVING carefully considered the contention of the learned counsel for the assessee, we are unable to sustain it. It is a case in which recovery of Rs. 2,30,000 from the possession of the assessee is not in dispute. In the first instance, before the customs authority he owned the proprietorship of the said sum which he derived from his sale or purchase of gold including contraband gold. The fact that later on he retracted the statement connecting the said amount with the contraband gold before the customs authorities and because of that it was held by the customs authorities that it is not proved that amount found in possession of the assessee is linked with the contraband gold, and that resulted in his exoneration from the proceedings under the Customs Act would not detract from the fact that he made the said admission before the customs authorities owning the amount to be his own and not belonging to somebody else. Before the IT authorities, the assessee disowned amount to be his own at all but has attributed the ownership or its source to five different parties by way of cash credits. It was claimed by the assessee that money has been borrowed from five different persons ranging between Rs. 30,000 to Rs. 80,000. The enquiry was directed to each of the five alleged lenders of money. The assessing authority in a detailed order found that none of the five persons were in a position to advance the stated sum respectively. It was found that each one of the lenders in his turn stated that he has borrowed money from others. Radhey Shyam was alleged to have lent Rs. 80,000. He in turn stated to have arranged Rs. 70,000 from others. Shankar Lal Soni had arranged Rs. 50,000 from others out of Rs. 60,000 attributed to him. Likewise Shri Bhanwarlal Soni shifted his source to others for Rs. 37,000 out of Rs. 40,000 attributed to him and Shri Bhagirath Soni arranged entire Rs. 30,000 from others. In most of the cases the lenders to these respective persons as named by them have not supported the story. The assessing authority noticed further different stand taken by these lenders before the customs authorities and the IT authorities. He also examined financial status of each of lenders and persons from whom the so called lenders of money to assessee have stated to have arranged money and found them of petty means, hardly in a position to lend any money. The assessing authority has noticed that though the assessee has later on retracted his admission, but his companion Jugal Kishore, who has fully corroborated first admission made by the assessee has not retracted his statement and that stand as it is. With such detailed enquiry the said amount was held to be income of the assessee of the previous year relevant to assessment year in question from undisclosed source with the aid of S. 69A. This led to initiation of penalty proceedings under S. 271(1)(c). The assessee did not respond to show cause notice issued to him time and again and did not lead any evidence. In the absence of any explanation furnished by the assessee, the AO, again by discussing the entire material that was before him reached the conclusion that assessee has concealed particulars of said income and levied penalty of Rs. 1,05,208, which was the minimum on imposable penalty. The CIT(A) found on discussing the material that the assessee has not furnished any explanation in penalty proceedings and explanation furnished by him during the assessment proceedings and now pressed in service 'to be false' and not merely 'not substantiated', and affirmed the order of assessing authority. On further appeal, the Tribunal has agreed with the findings recorded by CIT(A) and affirmed the order. ;