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TMI Blog1973 (8) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal has referred the following question: "Whether, on the facts and circumstances of the case, the Appellate Tribunal was correct in holding that the provisions of section 28(1)(c) of the Indian Income-tax Act, 1922, applied to the applicant ? " The assessment for the assessment year 1959-60 was completed by the Income-tax Officer as per his order dated August 15, 1960. The total income brought to tax in respect of that year was Rs. 60,537. The breakup of this amount was: Rs. 12 5 under " property ", Rs. 29,912 under " business " and Rs. 30,500 under " other sources ". The amount covered by the last head represented unexplained credits in a suspense account maintained by the assessee. In appeal against the assessment order, the Appellate Assistant Commissioner sustained the addition under " other sources " to the extent of Rs. 22,500. This was confirmed by the Tribunal also in further appeal by the assessee against the assessment order. During the assessment proceedings, the Income-tax Officer issued notice under section 28(3) of the Act on August 15, 1960. The assessee by annexure " A " reply, dated September 15, 1960, repudiated the charge that he has concealed the particula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he findings that were entered in the earlier appeal against the assessment order. This is what the Tribunal says in annexure " D " to the order : "We have carefully gone through the order of the Appellate Assistant Commissioner regarding the cash credits and we have also heard the assessee's representative on these points. It is clear that most of the persons from whom the amounts were alleged to have been borrowed were close relations or employees of the assessee. There are clear circumstances in each of these cases to indicate that the assessee's version regarding the cash credit was palpably untrue. It does not appear to us necessary to discuss each of these cash credits in detail in view of the fact that they have been considered once by the Tribunal in appeal in I.T.A. No. 3662 of 1961-62. The Tribunal has considered these items in great detail and we ,find no reason to differ from the view expressed therein. The facts of this case clearly indicate that the provisions of section 28(1)(c) would apply. It follows that the department was fully justified in imposing a penalty in respect of these cash credits. " Annexure "G " order is the final order in the appeal against the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onably 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." In Anwar Ali's case , there was no other material, apart from the falsity of the explanation given by the assessee, to come to the conclusion that the receipts were of a revenue nature and that the assessee had consciously concealed the particulars of his income or had deliberately furnished inaccurate particulars. Therefore, the appeal by the revenue was dismissed. The next decision to which Mr. Paripoornan, the learned counsel for the assessee, invited our attention is Commissioner of Income-tax v. Khoday Eswarsa and Sons. In that case, as in the case in hand, neither the Income-tax Officer nor the Appellate Assistant Commissioner had made any " independent discussion " regarding the question whether the assessee (a firm) had concealed the particulars of its income or whether it has deliberately furnished inaccurate particulars of such income. As in the case before us, the income-tax Officer had, in that case also, relied solely on the findings in the assessment proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the income-tax authorities to register Kohinoor Mills as a firm. In that appeal the Tribunal had found that there was not only no such firm in existence but that the Kohinoor Mills belonged to the assessee. The Tribunal had also noticed that of the four partners, three were minor grandchildren of the assessee, and that the final disposition of the accumulated profits was made only after the assessee became the sole proprietor of the business. It was also held by the Tribunal in the appeal relating to registration that the whole scheme was to disguise the profits of the assessee as those of the firm. It is in these circumstances that the court held that it cannot be said that " there was no relevant material or evidence before the Tribunal to hold that the assessee had deliberately concealed the particulars of his income or had deliberately furnished inaccurate particulars of such income. " This decision is not, in our view, of any assistance to the revenue. The learned counsel for the revenue strenuously contended before us that the finding entered by the Tribunal is a finding on a question of fact and that any adjudication thereon by us will be in excess of our jurisdiction. In s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot afford evidence on which the Tribunal could properly arrive at the conclusion about the guilt of the assessee. For this the revenue will have to establish on cogent material that the amounts in dispute are revenue receipts of the assessee or, in other words, taxable income of the assessee. The question we are considering is whether there was any material before the Tribunal to arrive at the conclusion it had made about the guilt of the assessee. In our view, there is no material at all for concluding that the receipts in question are taxable income of the assessee. In fact, there is no finding by the Tribunal to that effect. Therefore, the conclusion of the Tribunal that the assessee is guilty of an offence under section 28(1)(c) of the Act is based on no relevant material. This view is supported by the principles laid down by the Supreme Court in Anwar Ali's and Khoday Eswarsa and Sons cases. Therefore, the argument advanced by the learned counsel relying on the decision of Jabbar's case is only to be repelled. Our answer to the question referred is in the negative, that is, in favour of the assessee and against the revenue. The department will pay costs of this reference, inc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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