TMI Blog2002 (12) TMI 211X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Corporation as loan. To substantiate its version, copy of accounts of M/s. Manager Trading Corporation along with photocopy of cash book was furnished. Regarding the balance capital, it was stated that for assessment year 1988-89, the assessee had capital of Rs. 1,56,517, which comprised of sundry debtors and cash in hand and fixed assets. It was also stated that the dues from several concerns were also realized and fixed assets were sold at Rs. 38,719. These amounts were stated to be at Rs. 1 lakh and it was explained that the capital introduced in the business under consideration included this amount. The assessee was further required to furnish the complete details of dues realized, the assets sold and other details. After going through the details of balance sheet for assessment year 1988-89, the Assessing Officer found that the sundry debtors were shown at Rs. 55,382. Cash in hand was shown at Rs. 11,331 and cash at Bank at Rs. 802. It was also found that the assessee had not filed return for assessment year 1989-90. After considering all the circumstances, the Assessing Officer observed that the complete details of realization of dues and sales of assets could not be file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Department stood discharged. I am supported in this view by the Delhi High Court decision reported in 92 ITR 513. Under these circumstances, the penalty imposed is hereby upheld: 8. Before us, Shri Pandey, learned counsel for the assessee submitted that the assessee had agreed for addition only to purchase peace and the surrender of income under the circumstances of this case cannot lead to the inference that the assessee had concealed income. According to him, mere surrender of such income is not sufficient to impose penalty and as many more is needed for imposing penalty. It was further submitted that if a higher income is estimated, it does not amount to concealment of penalty. 9. Learned counsel also made reference to the following case laws:-- (a) CIT v. Suresh Chandra Mittal[2000] 241 ITR 124 (MP) (b) CIT v. S. Sankaran [2000] 241 ITR 825 (Mad.) (c) CIT v. Jugalkishore Har Goplal Das [2000] 243 ITR 220 (Ker.) (d) Jumabhai Premchand (HUF) v. CIT [2000] 243 ITR 812 (Guj.) (e) CIT v. Jai Narain [2000] 245 ITR 151 (All.) (f) CIT v. Jalaram Oil Mills [2002] 253 ITR 192 (Guj.) (g) CIT v. Ajaib Singh Co. [2002] 253 ITR 630 (Punj. Har.) (h) CIT v. Garg Trad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levied was set aside by the AAC. The Tribunal upheld the order of the AAC. Before the Tribunal, it was contended for the revenue that the act of the assessee was agreeing to treat the alleged loans as his own income was sufficient to hold that the assessee had concealed the income. The Tribunal held that by that single act of the assessee without anything more and without any other material placed by the Department, to sustain the finding of concealment, the assessee could not be regarded as having concealed his income, the Hon'ble High Court of Madras upheld the view taken by the Tribunal by observing as under: "In our opinion, the Tribunal has rightly held so. "Concealment" involves necessarily the intention to withhold the truth and to mislead deliberately. It cannot be said that there is concealment even when all the figures had been reported and included in the assessment and even before any investigation made by the Department had shown prima facie that the assessee had been dishonest in reporting the income. The inference sought to be drawn by the ITO from the admission of the assessee that the amount shown by him as loan, and that it be treated as part of his income, cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In penalty proceedings under section 271, the assessee claimed that he had offered additional income to buy peace of mind and avoid litigation. Penalty orders were passed and the CIT(A) confirmed the orders. But the Appellate Tribunal held that the Department had not discharged its burden of proving concealment and had simply rested its conclusion on the act of voluntary surrender done by the assessee in good faith, and that penalty could not be levied. On a reference, the High Court held that no penalty could be levied for concealment Suresh Chandra Mittal's case. The Department preferred appeals to the Supreme Court. The Supreme Court dismissed the appeals holding that no interference with the order of the High Court was called for. 15. Thus, in view of the above referred decisions, it is clear that if the assessee had given explanation and on non-acceptance of such explanation, the assessee had agreed for addition just to satisfy the income-tax authorities or agreed for addition under compelling circumstances, merely to buy peace, then only on the basis of such agreed addition or surrender of income, it cannot be held that the assessee had concealed income. Under such circum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccounts, there was a deficit of Rs. 15,868 when compared with the note book No. 5. Thus, the amount of Rs. 50,000 was added on account of the differences. Under these circumstances, the penalty imposed under section 271(1)(c) of the Act was found to be justified by the Hon'ble High Court of Madras. It may be pointed out that, in this case, the additions were made on the basis of documentary evidence found during the course of search, whereas in the present case, no document was found to make addition. Thus, this case is also distinguishable from the present case. 18. In the case of India Sea Foods, the assessee had agreed to treat a sum of Rs. 7lakhs as income from undisclosed sources and on the basis of such admission, the addition of Rs. 2,84,727 was made as income derived by the assessee from undisclosed sources. Simultaneously, penalty proceedings were also initiated. The Tribunal in that case rejected the contention of the assessee that in the absence of any addition, concealment of income is not established and the Tribunal held that the penalty was imposable. The approach of the Tribunal was upheld by the Hon'ble Kerala High Court. It may be pointed out that in that case t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
