TMI Blog1979 (3) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... e time of completing the assessment, initiated penalty proceedings us 271 (1) (c) of the Act. 3. In penalty proceedings, the assessee gave explanation dt. 11th June, 1975. Inter alia, it was contended that the purchases made by the assessee were quite genuine and were fully supported by the transport receipts. From the evidence on record, it was clear that the goods in fact were purchased at Agra and Beawar. According to the learned counsel, the payments in the three cases were disbelieved because in those three cases, payments were made in cash. In view of s. 40A(3) of the Act, such payment should have been made by cheque or a blank draft. In the explanation, the assessee has given the details showing that the purchase were not bogus but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in not returning the assessed income. Thus the learned AAC agreed with the finding of the learned ITO. 6. Before the Tribunal, on behalf of the assessee, the explanation given before the authorities below was rieterated. It was also contended that the Tribunal, while deciding the quantum matter, never gave a finding that the purchases in question were bogus. According to the learned counsel, the goods in question were purchased from Agra and Beawas. This fact was clearly proved that the goods did arrive at Ajmer and the truck freight and octroi were duly paid for the same. Unless the goods were purchased and received no freight or octroi would have been paid. Maharashtra Steel Rolling and Engineering Works, Bombay have denied this fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s also contended that both the parties being of outside place, it was not practicable to make the payment by crossed cheque or draft. It was further contended that the Tribunal, while deciding the quantum matter, clearly stated that they do nor express any opinion as to whether or not the purchases made by the assessee were bogus. Thus, it was contended that the entirety of the circumstance, and the facts as discussed above would go to show that there was no gross or wilful neglect on the part of the assessee in not returning the assessed income. Thus, it was contended that the initial burden which lay upon the assessee was duly discharged. At the same time it was submitted that on behalf of the Revenue no material was brought on record to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , no explanations to s. 271 (1) (c) is not applicable. The learned counsel for the assessee was not able to show that on facts, the Explanations is not applicable. Looking to the returned income, and the assessed income, it is clear that on facts the Expln. to s. 271 (1) (c) is applicable. 9. In view of the aforesaid facts, it is for the assessee to show that there was not fraud or gross or wilful neglect on its part in not returning the assessed income. The assessee maintained regular books in the ordinary course of the business. The purchases in question were duly recorded in the books of the assessee. Really speaking, the entries regarding the purchases were in the middle of the account books of the assessee. The goods in question were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned AAC holding that therefore, purchases were bogus no longer remained. This matter was very much in issue before the Tribunal in quantum matter, but the Tribunal, preferred not to give finding whether these purchases were bogus or not. In penalty proceedings the assessee gave detailed explanation as stated above showing that the purchases were not bogus. If the aforesaid facts are taken into consideration in their entirely it would be clear that there is no convincing evidence on record to established that the purchases in question were bogus. On the other hand the preponderance of probabilities are in favour of holding that the purchases in question were genuine. The trading additions were made on estimate basis. In the decision in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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