TMI Blog1985 (4) TMI 329X X X X Extracts X X X X X X X X Extracts X X X X ..... g work of preparing covers of silver for the jail idols. In the year 1976, there was a search by the customs department. During the course of search, duplicate books of account, etc., as discussed in the body of assessment order for the assessment year 1970-71 were found and seized. The books of account were found from the possession of Shri Amritlal Hathichand Shah, a friend of the deceased. The deceased also admitted during the course of inquiries by the customs department that the duplicate books were kept at a friend s place for fear of detection by the income-tax authorities in case of raid by that department at his house. All these and other material facts are discussed in the body of assessment orders for all these years and these ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years 1970-71 to 1972-73. As for the assessment years 1972-73 and 1973-74, since the seized books and documents contained details of expenses incurred the profit is worked out after deducting such expenses from receipts. Penalties for all these years being levied on the basis of the concealment as detected on reassessment. 3. At the time of hearing, the learned counsel for the assessee was fair enough to state that in view of the decision of the Hon ble Gujarat High Court in the case of CIT v. Sumantbhai C. Munshaw [1981] 128 ITR 142, he would not address the Court on the legality of the orders passed on one of the legal heirs of the assessee. However, he hastened to state that he is not giving up this ground. As regards the merits of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave been considered as real ones ; still results disbelieved, gross profit estimated at 21 per cent on the sales of ₹ 30,480. 1971-72 9,398 12,930 Results as per seized books ; sales ₹ 60,123, gross profit estimated at 21 per cent at ₹ 12,625. 1972-73 10,812 20,280 Sales ₹ 70,401 Expenses ₹ 50,425 Surplus ₹ 19,980 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the assessee has agreed to the total income assessed under section 143(3) read with section 148 ; but the appeal is not filed only because : (a)The legal heir has no knowledge about the business activities. (b)To avoid further litigation and further expenses on appeal, etc. Moreover, for purpose of considering the concealed income , the gross profit previously shown should have been deducted from the profit/gross profit arrived at as per orders under section 148/143(3). This is not done. So, if at all there is any concealment, it is not brought home. Letter dated 22-3-1982 : The details of income shown in the returns of income filed with the help of data obtained from the seized books, have been furnished in a statement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AAC ought to have cancelled the penalty imposed by the ITO under section 271(1)(c), instead of reducing the same. The learned representative for the department, on the other hand, strongly relied on the orders of the income-tax authorities. He further submitted that since the assessee himself had admitted before the customs authority that he was keeping duplicate sets of books of account at his friend s place with a view to conceal his true income from the revenue, mens rea is clearly established and, therefore, the income-tax authorities were fully justified in imposing penalty under section 271(1)(c ). He further submitted that the ITO was forced to estimate the income of the assessee instead of accepting the income as per seized books as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rofit. It is no doubt true that the assessee might have made a statement before the customs authority that his books were kept in the residential premises of Shri Amritlal Hathichand Shah because of the fear of income-tax raid . However, under what circumstances the assessee was required to make this confession is not available on record. Perhaps, he might have made this statement due to nervousness and old age. I entirely agree with the submission of the learned counsel for the assessee that if the ITO had accepted the book results as per the seized books then, perhaps the assessee would not be in a position to resist the penalty. However, as mentioned above, this is not a case as the ITO has estimated the income of the assessee by adopti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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