TMI Blog2002 (8) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... delivered by N. K. SODHI J.-The question of law that arises in this appeal filed by the assessee under section 260A of the Income-tax Act, 1961 (for short "the Act"), is whether penalty is attracted under section 271(1)(c) of the Act where income is assessed purely on estimate basis and additions are made in the declared income on that basis. The facts giving rise to this appeal lie in a narrow compass and these may first be noticed. The appellant is a Halwai (sweets seller) and he was not maintaining any accounts. He filed his income-tax return on estimate basis and declared his income at Rs. 52,000. The income was, however, assessed by the Assessing Officer at Rs. 2,07,500 by estimating the appellant's sales and gross profit. The ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder, the assessee filed an appeal before the Commissioner of Income-tax (Appeals), Patiala, who allowed the same holding that there was indeed no positive evidence whatever to show that the appellant's income during the year in question was, in fact, more than the income returned by him and that estimated additions in the returned income do not attract penalty under section 271(1)(c) of the Act. The Revenue went up in appeal before the Income-tax Appellate Tribunal which was allowed by order dated May 30, 2001. It is against this order that the present appeal has been filed which raises the aforesaid question of law. In order to attract clause (c) of section 271(1) of the Act, it is necessary that there must be concealment by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shed inaccurate particulars of such income. There has to be a positive act of concealment on his part and the onus to prove this is on the Department. We are also of the considered view that the Tribunal grossly erred in law in relying on Explanation 1(B) to section 271(1)(c) of the Act to raise a presumption against the assessee. The assessee had justified his estimate of income on the basis of household expenditure and other investments made during the relevant period. It is not the case of the Revenue that he had, in fact, incurred expenditure in excess of what he had stated. In this view of the matter, it cannot be said that the explanation furnished by the assessee had not been substantiated or that he had failed to prove that such exp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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