9911796707
TMI Blog1980 (4) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... ccept the correctness of the return. He found that on 12th December, 1957, and 16th January, 1958, the excess of expenditure over the disclosed available cash was Rs. 17,720 and Rs. 65,066 respectively. He also noticed several deposits, totalling Rs. 28,200, entered in the names of certain Sendhi shop-keepers. The assessee's explanation that the excess expenditure was met from amounts deposited with him by some shop-keepers but not entered in his books was not accepted. The alternative explanation that expenditure incurred earlier had possibly been recorded later was also rejected. In regard to the cash deposits of Rs. 28,200 the assessee explained that they represented amounts deposited with it as security. That explanation was rejec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said to have been introduced in this year. Allowing the appeal, the Appellate Tribunal set aside the penalty order made by the IAC. At the instance of the Commissioner, the following question was referred to the High Court : " Whether, on the facts and in the circumstances of the case, the Tribunal is justified in holding that no penalty is leviable ? " The High Court held that the Appellate Tribunal was not justified in holding that no penalty was leviable. In this appeal, it is urged by learned counsel for the assessee that the High Court erred in interfering with a finding of fact, that the penalty proceedings being quasi-criminal the burden of proof lay on the revenue to establish that a penalty was attracted and that the intangib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rove resting on the revenue, to ascertain whether a particular amount is a revenue receipt. No doubt, the fact that the assessment order contains a finding that the disputed amount represents income constitutes good evidence in the penalty proceeding but the finding in the assessment proceeding cannot be regarded as conclusive for the purposes of the penalty proceeding. That is how the law has been understood by this court in Anwar Ali's case [1970] 76 ITR 696 (SC), and we believe that to be the law still. It was also laid down that before a penalty can be imposed the entirety of the circumstances must be taken into account and must point to the conclusion that the disputed amount represents income and that the assessee has consciously conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 757. There can be no escape from the proposition that the secret profits or undisclosed income of an assessee earned in an earlier assessment year may constitute a fund, even though concealed, from which the assessee may draw subsequently for meeting expenditure or introducing amounts in his account books. But it is quite another thing to say that any part of that fund must necessarily be regarded as the source of unexplained expenditure incurred or of cash credits recorded during a subsequent assessment year. The mere availability of such a fund cannot, in all cases, imply that the assessee has not earned further secret profits during the relevant assessment year. Neither law nor human experience guarantees that an assessee who has been d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revenue of proving the existence of material leading to that conclusion. The Appellate Tribunal erred in law in confining itself to the fact that an intangible addition had been added to the assessee's book profits two years before and that a part of that amount remained available to the assessee thereafter. The High Court is right in departing from that limited approach and in insisting on a consideration of all the relevant facts and circumstances of the case relied on by the revenue for the purpose of determining whether the revenue has succeeded in discharging its burden. But while considering the legal principles involved in the application of s. 271(1)(c) the High Court, in our opinion, has erred in entering into the facts of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
