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2006 (10) TMI 106 - HC - Income TaxPenalty imposed u/s 271(1)(c) - furnished inaccurate particulars by concealing income - trading of silk yarn - unexplained capital and undisclosed profit - HELD THAT:- We find that after the insertion of Explanation 1 to section 271(1)(c) of the Act by the Taxation Laws (Amendment) Act, 1975, if the explanation offered by the assessee regarding the additions is either found to be false and remained unsubstantiated, the additions so made are deemed to be the concealed income, and therefore, the penalty provisions are attracted. The decision relied upon by the Tribunal relates to the assessment years prior to April 1, 1976, when the present Explanation was not in the statute book, and, therefore, they are not applicable in the present case. We are therefore, of the considered opinion that the Tribunal has completely misdirected itself in cancelling the penalty. We, accordingly, answer the question referred at the instance of the Revenue in the negative, that is, in favour of the Revenue and against the assessee.
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