During the scruitiny assessment,
1. the AO called for the statement of Assessee's a/c in the creditors books. The statment showed some payment made by the assessee to the creditor. But no such payments were made by the assessee and these were neither reflected anywhere in the assessee's books. The creditors statement was partly proved wrong. But the assessee agreed for the addition to have peace of mind. The AO further levied penalty on such addition. What is the legal status of such statement? Is the AO right in levying penalty? Please quote some case laws regarding the same.
2. the AO asked for the confirmation from unsecured loans. These loans were taken by the assessee during the year 1998 - 1999 which means that 6 years has lapsed since the loans were taken. The confirmations were submitted by the assessee. The assessing officer futher asked for the bank statements of the lenders. Can the AO demand the records beyond a period of six years. What is the status of these loans if not repaid in six years from the year of borrowing. Please quote some case laws regarding the same.
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