TMI Blog1971 (8) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the circumstances of the case, the Income-tax Appellate Tribunal was justified in law in holding that the assessee has not concealed his income represented by the difference between the cost of construction of the building as per the Appellate Tribunal's order and the assessee's accounts and in cancelling the penalty under section 271(1)(c) ? " The assessee is an individual and he returned an income of Rs. 5,731 and Rs. 1,359 for the assessment years 1960-61 and 1961-62 respectively. The assessee began the construction of a hotel building at Kasaragod and completed it by the end of December, 1970. The total cost of construction of the building according to his books of account was Rs. 86,081. The Income-tax Officer estimated the cost ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner rejected the assessee's plea that he had not deliberately concealed the particulars of the income and held that there was concealment of the income to the extent of the difference between the Appellate Assistant Commissioner's valuation of the cost of the construction of the building and the assessee's estimate of such cost. The Inspecting Assistant Commissioner by his combined order dated March 20, 1964, passed under section 271(1)(c) read with section 274(2) of the Act, imposed a penalty of Rs. 17,000 for 1960-61 and a penalty of Rs. 14,000 for 1961-62. The assessee filed appeals to the Appellate Tribunal. The Appellate Tribunal pointed out that the cost of construction of the building was determined only on the basis of an estimat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich explanation has been found to be false, it does not follow that the receipt constitutes his taxable income ...... It would be perfectly legitimate to say that the mere fact that the explanation of the assessee is false does not necessarily give rise to the inference that the disputed amount represents income. It cannot be said that the finding given in the assessment proceedings for determining or computing the tax is conclusive. However, it is good evidence. Before penalty can be imposed the entirety of circumstances must reasonably point to the conclusion that the disputed amount represented income and that the assessee had consciously concealed the particulars of his income or had deliberately furnished inaccurate particulars." See ..... X X X X Extracts X X X X X X X X Extracts X X X X
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