9911796707
TMI Blog2010 (2) TMI 962X X X X Extracts X X X X X X X X Extracts X X X X ..... ng honey in the rural areas. The persons so engaged, are rustic persons and sell their honey to the appellant which is tested for quality. It is stated that the process to test the quality of raw honey and bee wax, takes two to three months. Thereafter, the honey is graded and price is fixed. The persons, who leave honey with the appellant in raw form, are paid their dues after its quality testing by the appellant firm. It has been stated that suppliers of raw honey and bee wax are rustic persons and nomadic tribal people, who are known as Kanjars and Banjaras by castes. Ordinarily, these people do not have any specific place of their living. According to the appellant's counsel, these people move from one place to another in search of raw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en stated that five creditors who did not turn up in response to notice under sub-section (6) of section 133 of the Act, had collected funds in subsequent year and the account of the subsequent year was accepted by the Income-tax Department in the assessment year 1993-94. The Assessing Officer had drawn inference that the appellant had concealed the income since five creditors were not appeared for verification of the amount. The Assessing Officer further has drawn inference that surrender of amount of Rs.1 lakh by the appellant, was achieved because of independent inquiry. The Assessing Officer held the surrendered amount as liability and also con-cealment of income in the balance-sheet. It has been held by the Assessing Officer that while ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had claimed wastage in honey at the rate of 12.11 per cent. which was 11.59 per cent. in the assessment year 1990-91 and 11.6 per cent. in the assessment year 1989-90. A perusal of the Tribunal's order shows that the Tribunal has taken adverse material for the purpose of imposition of penalty on account of surrender of Rs. 1 lakh. The Tribunal reiterated the views taken by the Assessing Officer that the assessee has surrendered Rs.1 lakh which is lesser amount referred to above, in view of section 145(1) of the Income-tax Act. 7. This court admitted the appeal on December 19, 2003, subject to the aforesaid backdrop, on the following substantial questions of law : "(I) Whether a normal trade practice followed by an assessee du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e purpose of concealment of particulars. 9. It has not been disputed that the appellant is engaged in the business of raw honey and bee wax and the persons supplying the raw honey and bee wax, are rustic persons or nomadic tribal persons known as Kanjars and Banjaras. Since the involvement of rustic and nomadic tribal persons in the business of raw honey and bee wax in which the appellant is involved, has not been disputed, then the controversy should be looked into with that angle. It is not a case where the literate or literate persons are involved and supply raw honey and bee wax to the appellant. It is a case where rustic and illiterate persons are involved in supply of raw honey and bee wax to the appellant. Apart from this fact, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against the assessee. No action may be taken in pursuance of sub-section (1) of section 271 of the Act on the basis of surmises and con-jectures. In the absence of some clinching evidence or material, only because five rustic persons who were engaged in supply of raw honey and bee wax to the appellant, had not turned up, does not seem to create a ground to proceed against the appellant under sub-section (1) of section 271 of the Act. 12. Sri D. D. Chopra learned counsel has given much emphasis to the fact that five persons who had not turned up in response to notice issued under sub-section (6) of section 133 of the Act. The fact remains that the pleading of appeal contained in paragraph 12 of the memo of appeal, has not been by the respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st be based on some material evidence on record. In the present case, merely on the ground that a few raw honey and bee wax suppliers did not turn up in response to the notice under sub-section (6) of section 133 of the Act, there appears to be no positive material to show the concealment of income or furnishing incorrect particulars by the appellant. Of course, the situation would have been different in case the appellant would have been dealing with the persons who are literate or urban people. In a country where 40 per cent. persons are living below poverty line and equal percentage of people, are illiterate, then while proceeding ahead to impose penalty under sub-section (1) of section 271 of the Act, the assessing authority or taxing a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
