TMI Blog1999 (11) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... ee supported its claim by producing 16 bills of various dates from December 2, 1984, to December 31, 1984, issued by one Elgi Equipments Ltd., Coimbatore. The Assessing Officer found that the said bills issued to the assessee did not figure in their ledger and the trade balance with the assessee was only Rs. 5,583.20 as on December 31, 1984, as against Rs. 9,98,200 appearing to their credit in the books of the assessee. The assessee, by its letter dated February 24, 1988, contended that the bills are genuine and bona fide and that they have made payments to them only in discharge of those bills. The Assessing Officer called upon Elgi Equipments to explain its stand. According to them, Elgi Equipments did not do any repairs, but had supplied one new unit of pastueriser to the assessee. The Assessing Officer had also obtained a statement from one Shri P. E. Menon, a labour contractor, attached to Elgi Equipments, stating that the old pastueriser was dismantled and after dismantling, the new unit was installed. The Assessing Officer also obtained a statement from the production engineer of Elgi Equipments in support of their stand. The Assessing Officer also collected gate passes from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s alleged that the assessee wanted that party to make 16 bills to match exactly with the amount raised in the invoice. This letter was obtained in the course of penalty proceedings. This letter was not put to the assessee. Therefore, the assessee vehemently objected in the quantum appeal to the Tribunal considering that letter. But the objections were brushed aside. Thus addition was sustained by the Tribunal. The Deputy Commissioner of Income-tax (Appeals) by letter dated March 21, 1988, called upon the assessee to show cause why penalty should not be levied for concealment of income or for having furnished inaccurate particulars of income. The assessee denied the allegation and contended that certain statements were taken behind its back and used against it and it had not been furnished with copies of the same. Overruling the objection, the Deputy Commissioner of Income-tax (Appeals) levied penalty under section 271(1)(c) of the Act. On appeal, the Commissioner of Income-tax (Appeals) after referring to its earlier findings, observed that the explanation offered by the assessee was false and the amount added to its income represented its concealed income and the levy of penalty w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of repairs issued by Elgi Equipments Ltd. payments for some of which have been specifically made against those repair bills, substantiated its explanation and that levy was unjustified. Learned counsel for the Revenue submitted that the Tribunal's conclusions are absolutely erroneous and untenable in law. Modus operandi adopted by the assessee to give a wrong picture has been fully established. The conclusion that there was non-observance of the principles of natural justice is clearly erroneous and contrary and against the materials on record. The onus to prove that there was no concealment or furnishing of required materials squarely lies on the assessee and it was not discharged. In other words, it is submitted that the conclusions have been arrived at by ignoring relevant materials and relying on irrelevant materials. Learned counsel for the assessee, on the other hand, submitted that the Tribunal has arrived at a conclusion on the facts that there was no concealment, and as such, no question of law arises. It is submitted that though in the quantum appeal certain conclusions have been arrived at, they are not conclusive and at the most may be persuasive. This is so because a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the principles of natural justice. The Commissioner of Income-tax (Appeals) did not admit some of the documents filed in the appeal proceedings as they were not produced before the assessing authority. It cannot be called a violation of the principles of natural justice. The assessee was having these documents before the Assessing Officer passed the order and nothing prevented the assessee from producing the same before the assessing authority. In any event, the Tribunal also considered these documents and found as follows : "The papers which formed part of the paper book giving the minutes of the various meetings held by the members of the top management do not throw any light which could go to decide the issue one way or the other, The other thing that is evident is that the management was aware that the repair and renovation cost could exceed the cost of a new plant. In the light of these discussions, it would appear that either the assessee or Elgi Equipments Ltd. have a lot to hide but if the materials as culled out above are properly marshalled there could be no other inference except that payment to Elgi Equipments Ltd. was for erection of a new pasteuriser plant and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owed for the transportation of material necessary for alleged repair and renovation work had to be the same and in such circumstances the transportation has to be supported by gate passes. No such passes were available with the assessee. At any rate, none was produced. Thus, it is evident that the assessee had no worthwhile material to support its claim. As has been rightly contended by the learned Departmental representative, where a deduction is claimed, theonus is squarely on the assessee to prove its claim. Apart from the 16 bills which Elgi Equipments Ltd. claimed to be estimate or advance bills submitted at the request of the assessee and an entry in the store register showing issue of a conveyor chain there is no other evidence to support the claim." Therefore, the Tribunal independently considered the evidence and agreed with the findings of the earlier authorities that no repairing work was carried out by the assessee during the calendar year, 1984, so as to claim deduction for the assessment year 1985-86. While arriving at the conclusions, the Tribunal has also considered all the points put forward by the assessee and the finding that no repairing work was carried out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was not on account of any fraud or any gross or wilful neglect on his part, it is evident, no penalty can be levied. Even after the amendment of 1964, the penalty proceedings continue to be penal proceedings. Similarly, the question whether the assessee has concealed the particulars of his income or has furnished inaccurate particulars of his income continues to remain a question of fact. Where the Explanation has made a difference is while deciding that question the presumption created by it has to be applied, which has the effect of shifting the burden or proof. The rule regarding burden of proof enunciated in CIT v. Anwar Ali [1970] 76 ITR 696 (SC), is no longer valid (see CIT (Addl.) v. Jeevan Lal Safi [1994] 205 ITR 244 (SC)). Whether it is a case of undisclosed or unexplained cash deposit or any other concealment, the standard is the same. The principle enunciated in Anwar Ali's case [1970] 76 ITR 696 (SC), that mere rejection of the explanation of the assessee is not sufficient for levying penalty no longer holds good and it is no longer necessary that the Department must go further and establish that there was conscious concealment of particulars of income or a deliberate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated July 30, 1985. The new pasteuriser unit supplied on July 31, 1985, was commissioned on November 23, 1987. It is not the case of the assessee that another unit has been received subsequently which was commissioned in November, 1987. Certain documents, including one file containing documents relating to the new unit sent by Elgi Equipments Ltd. as per invoice dated July 30, 1985, were also referred to in that connection. These documents were checked by the sales tax authorities as would be evident from official seals. With reference to these documents, the Revenue authorities came to the conclusion that Invoice No. 1188, raised by Elgi Equipments Ltd. is the only document by which the entire pasteuriser unit had been documented. The Tribunal had not taken note of relevant materials and had based its conclusions on irrelevant materials, presumptions and surmises. That gives rise to a question of law relating to the validity of the Tribunal's judgment and conclusions contained therein. Though the conclusions may have a colour of factual finding, but, in view of the inevitable conclusion that it has been arrived at without considering the relevant materials, makes it unreasonable ..... X X X X Extracts X X X X X X X X Extracts X X X X
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