TMI Blog1995 (5) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... 10-9-1986 was not applicable to the facts of the assessee's case and therefore, he erred in holding that no penalty is exigible in view of the second exception contained in Explanation 5 to section 271(1)(c). It was also urged that but for the search conducted by the department on 8-10-1985, the concealed income would not have come to the surface. Therefore, the CIT (Appeals) ought to have upheld the levy of penalty. 2. The facts leading to the levy of penalty for concealment of income under section 271(1)(c) have been stated in the impugned orders of the Assessing Officer as well as the first appellate authority. The case of the Assessing Officer was that the search conducted on 8-10-1985 revealed several investments during the relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not been entering the correct amount of daily collection in the Daily Collection Register intended for income-tax purposes. Regarding other investments surfaced at the time of search he had not offered any Explanation for that omission. This would reveal that the assessee has disclosed the concealed income in his statement under section 132(4). Further the cash found and seized at the time of search, was adjusted against the tax and interest in respect of the income offered by the assessee. Hence, in his opinion, the second exception would be applicable and, therefore, Explanation 5 to section 271(1)(c) was not attracted. As regards, the applicability of the amendment for levy of penalty, the CIT(Appeals) noted the decision of the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. He has also relied on the order of the Tribunal in assessee's own case for the earlier assessment year 1984-85 in ITA No. 3900/Mds/88, dated 13-7-1992. 5. Sri V.K. Jayaraman, ld. counsel for the assessee narrated the background of the case and pointed out that on the date of search on 8-10-1985 a sworn statement was recorded by the income-tax authority in his own handwriting and the assessee was simply asked to sign. The point made by him was that the statement was not voluntary and truthful but was made under compulsion, inducement, threat or promise. He pointed out that the slips issued by the assessee and which were seized by the department did not relate to the relevant accounting year 1-4-1984 to 31-3-1985 with the result that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax, interest and even penalty was paid up and collected by the department. Though he did not clarify on the point that the concealment takes place on the date when original return is filed, he pointed out that the income returned by the assessee was accepted in toto by the Assessing Officer after elaborate discussion. In short, the investments which surfaced at the time of search were covered by the income shown in the return filed by the assessee but for which the income returned would not have been accepted. From this point of view, there is no concealment in the return filed by the assessee. Therefore, the assessee has to resort to exceptions provided in the Explanation 5 to section 271(1)(c) because the assessee voluntarily included eve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llection registers happened to be maintained by the assessee for the period from 1-4-1985 relevant for the assessment year 1986-87 and not for the assessment year 1985-86. 7. It is pertinent to note that ld. counsel for the assessee has categorically stated that sworn statement has been recorded by the Income-tax Inspector and the cash flow statement was prepared by the department to cover up all the investments surfaced and the assessee was asked to admit suppression or omission of professional income. Even if there is exaggeration in the claim made by the ld. counsel for the assessee, the fact remains that unexplained investment can be explained by the assessee only out of the main source of income i.e. professional income. The fact rem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iminary statement which shows that the assessee has admitted under statement of professional income. Even if it is not given by him voluntarily as vehemently contended by the ld. counsel for the assessee, the cash found was admitted to be the savings out of professional income of earlier years and partly the cash balance of his father. To a specific question regarding other investments the assessee admitted that they represented the investments made out of the professional income earned in earlier years. In short, there is enough material on record to show that professional income has been suppressed. Unexplained investments were made out of such suppressed professional income and the cash of Rs. 27,000 found in the clinic, in the residence ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
