TMI Blog1965 (3) TMI 105X X X X Extracts X X X X X X X X Extracts X X X X ..... is a registered partnership firm doing business in grocery. For the account year ended April 12, 1955, relevant to the assessment year 1955-56, a return of income of ₹ 20,861 was made. An examination of the account books of the assessee revealed, between May and October of 1954, credits amounting to ₹ 47,800 in the day-book. The day-book indicated the credits as under suspense account. But the suspense account which was maintained by the assessee contained no entries. The relevant ledger purported to record certain credits and withdrawals of credits, but those entries were in most cases made either in the first or the last line of the ledger page. The entire amount was finally cancelled by debit entries. The explanation of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e question set out above has been referred to us. It is the contention of Mr. Meenakshisundaram, learned counsel for the assessee, that there was really no material before the Tribunal on foot of which it could reach the conclusion that the assessee had concealed the particulars of its income or deliberately furnished inaccurate particulars of its income. It is urged that the assessee's explanation with regard to the entries in the accounts was disbelieved, but that fact alone would not suffice to establish the basic requirement for the imposition of a penalty under the provision. It is argued that in those circumstances, the Tribunal was wholly unjustified in agreeing with the departmental authorities that there had been a deliberat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reciation of an explanation tendered by the assessee in reassessment proceedings under section 34. That was a case where an entry appeared in the account books of the assessee showing the receipt of a sum on conversion of high denominational notes. It is observed in this decision that at that stage the department is not required to prove anything and that it is the duty of the assessee to establish what the source of that money was and to show further that it was not in the nature of an income. If the explanation offered by the assessee, scrutinised in the light of the books of account or other documents or evidence, produced by the assessee, established that the receipt was not of an income nature, obviously the amount cannot be brought to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of proof cannot be taken on the basis of the theory that action under section 28 is punitive in its scope. Notwithstanding the above observations of the Supreme Court, where the nature of the penalty imposed is regarded as an additional tax, it is not denied that this additional tax is imposed for the dishonest or contumacious conduct of the assessee. We are unable to agree with Mr. Balasubrahmanyan that merely because of the description of this levy as additional tax it is not necessary for the department to show that the assessee did in fact invite the application of this provision by concealment of the particulars of his income or deliberately furnishing inaccurate particulars of such income. The section requires that the Income-tax Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,018 bags to the total value of ₹ 49,513-3-0. It is again the contention of the assessee that the sum of ₹ 47,800 entered as credits were set off against these sales of sugar which took place during the last twelve days of the accounting year. It is really difficult to follow the method of accounting said to have been employed. Mr. Meenakshisundaram stated in the course of his arguments that this was the first year in which the assessee had any business in sugar. In the grounds of appeal before the Appellate Assistant Commissioner, it was stated : In the course of sugar sales, certain amounts thereof were segregated and kept as safe deposit in the day-book itself. This was done with a view to have a reserve, since as a new ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ond the entry of the various sums as credits, it does not appear that these sums came out of the normal sugar transactions which took place on dates earlier to the dates of credit. It is impossible to discover, from the manner in which the accounts had been maintained, wherefrom these amounts were drawn, and if one thing is clear it is that these sums were not withdrawn from general trading account in sugar and kept apart, as claimed by the assessee. The explanation is not even intelligible, and if the Income-tax Officer rejected it out of hand, we are unable to say that he acted improperly in doing so. The Tribunal also referred to the fact that the alleged sales of sugar, which took place between April 1, 1955, and April 13, 1955, were at ..... X X X X Extracts X X X X X X X X Extracts X X X X
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