TMI Blog1996 (11) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... information collected from the warehousing corporation that there was a difference between the stock kept in the warehouse and the stock shown by the assessee in its books of account. The assessee-firm was required to reconcile the difference. The assessee-firm furnished the required information about the stock kept in the warehouse. It was found that 1,299 bags of barley (jaun) were available in the warehouse as on March 31, 1976, but the assessee could furnish details with respect to 1,205 bags only. The accounting year of the assessee ended on March 31, 1976. The assessee submitted an explanation that 94 bags of barley, which had been kept in the warehouse belonged to one Sardul Singh. No confirmation from the owner was, however, filed nor the date of arrival of the goods was disclosed. It was also found by the Assessing Officer that the goods had been sold by the assessee-firm on own account and not in its commission agency. Since the stock of 94 bags had not been shown by the assessee in its closing stock as on March 31, 1976, its value was worked out at the rate of 92 per quintal at Rs. 6,440. The value of the stock so worked out at Rs. 6,440 was added to the assessee's incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing Officer did not agree with the assessee's plea, the assessee went in appeal before the Commissioner against the levy of penalty with the same plea and it was accepted. The Revenue went in appeal before the Tribunal against the order of the Commissioner of Income-tax cancelling the penalty, but the order of the Commissioner was upheld by the Tribunal. Shri R. P. Sawhney, learned senior counsel for the Department, has argued that it was a case of furnishing inaccurate particulars, leading to the concealment of income and, therefore, levy of penalty by the Assessing Officer is wholly justified. There was no evidence to show that Sardul Singh possessed or had cultivated land. There was no evidence to indicate the production of barley from his field nor was there any evidence whatsoever to indicate that Sardul Singh had brought his produce to the assessee's place for sale. It is stated that Sardul Singh was admittedly a truck driver. The assessee had also filed initially a confirmatory letter from Sardul Singh and thereafter, on a direction from the Commissioner of Income-tax (Appeals), produced Sardul Singh before the Assessing Officer. The assertion by Sardul Singh that he ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shed inaccurate particulars of such income." After the word "deliberately" was omitted with effect from April 1, 1964, mere furnishing of inaccurate particulars attracted the levy of penalty. Explanation 1 had also been inserted earlier by the Finance Act, 1964, but was substituted by the Taxation Laws (Amendment) Act, 1975, with effect from April 1, 1976. The provision as it existed in the relevant assessment year 1976-77 can be divided into two parts-- (i) concealment of the particulars of income, and (ii) inaccurate particulars of such income given in the return. These parts have to be read as independent parts and any ingredient may be the cause for the imposition of penalty. Both the parts may be overlapping in some cases. But both the parts have been used distinctly and these are with respect to two separate offences. The two charges can subsist in many cases. The effect of the Explanation, as introduced by the Finance Act, 1964, and the deletion of the word "deliberately", was that the onus had been shifted from the Department to the assessee. The Explanation amounts to a rule of evidence which is, however, not absolute but rebuttable. The presumption, which arose fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any confirmation from the person who had claimed to be the owner of the stock nor could he produce him before the Assessing Officer. However, at the appellate stage, he did succeed in producing a confirmatory letter and, on a direction from the Commissioner, he produced Sardul Singh also before the Assessing Officer for examination. The facts emerging from the statement of Sardul Singh do not make out a case in the assessee's favour that he was able to substantiate it. Sardul Singh was basically a truck driver and he had no material available with him to show that he possessed or cultivated agricultural land. There was no evidence on record to show that he had brought his stock from his field and had delivered the same to the assessee for sale. There was nothing on the record of the warehousing corporation which could indicate that the stock of 94 bags of barley had been brought for storage by Sardul Singh. Thus, the explanation offered by the assessee-firm was not substantiated by cogent and reliable evidence at all. Mere submission of an explanation is not sufficient unless the assessee is able to substantiate it. If, however, the assessee's explanation is found to be bona fide a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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