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TMI Blog1976 (5) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... ade in the names of the minor sons of Shri Paneerselvam was added as income under the head "Other Sources". Since the above inclusion was made on the ground that the said investment was made out of the funds of the assessee family and not out of the individual funds, of Sri Paneerselvam as claimed by the assessee, the ITO initiated penalty proceedings for concealment of income under s. 271(1)(c) of the Act. In reply to the notice issued proposing to levy penalty, the assessee submitted that Sri Paneerselvam was carrying on business independently and purchasing properties in his own name and in the names of his minor sons, that the assessee-HUF had nothing to do with the said investment that due to misunderstanding among the members of the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said provision the ITO is required to refer the matter to the IAC only in case in which the concealed income as determined by the ITO in the assessment exceeded Rs. 25,000 and therefore the ITO correctly followed the procedure according to the amend s. 274(2). On the merits of the case of the AAC found that the investments made were not properly explained by the assessee family and that the assessee family in the return filed had admitted the unexplained investments as its income. He, therefore, upheld the penalty. 3. Before us the learned representative for the assessee submitted that there is no justification for the levy of penalty. He pointed out that alongwith the return filed in response to the notice under s. 148 the assessee has f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1973-74 dt. 30th April, 1974 and submitted that the Tribunal sustained that addition for the reasons that the plea of the assessee that Paneerselvam threw the property into the hotchopt of the family and then divided the same, was not established beyond doubt. He pointed out that the said observation would go to show that the addition was sustained only for want of proof and there is no positive finding that the assessee is guilty of concealment of income. He strenuously urged that Shri Paneerselvam was carrying on business independently since 1941, that the statement made by Sri Singaram Pillai on 20th Aug., 1943 to the Co-operative Bank to the effect that neither he nor his other children had any interest in the properties of Sri Paneerse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Shri Paneerselvam was made out of the individual founds of Paneerselvam and not out of the assessee family. Admittedly Sri Paneerselvam had filed a voluntary return on 6th Aug., 1971 for the year 1968-69 in the status of individual. Since the investment in question that were made in the names of the minor sons were not properly explained the said investment were admitted by him in the return filed by him. The assessment on Sri Paneerselvam was accordingly completed on 13th March, 1973. After completing the said assessment the assessment of the assessee family before us including the very same investments were made under s. 143(3) read with s. 147(a) on 28th March, 1973. In the appeal preferred against the said assessment of the assessee f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, we are satisfied that it cannot be stated that the assessee had any intention to conceal the investments made in the names of the minor sons of Sri Paneerselvam. While Shri Paneerselvam has claimed the investments as having been made out of his separate funds and the same has also been accepted by the Department, it is the Department's case that the said investment were made out of the joint family funds of the assessee family. No material has been brought on record show that the impugned investments were in facts made by the assessee family out of the funds belonging to it. It is true that the assessment has been made on the family including the impugned investments. But for the purpose of levy of penalty it has to be established that t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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