TMI Blog1996 (2) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... at there was no material to show that the assessee had offered the credits of Rs. 15,000 for assessment as his undisclosed income ? 2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in not considering and pronouncing upon the grounds Nos. 4 and 5 raised in the grounds of appeal filed by the Department ? " The assessee filed his return for the assessment year 1973-74 admitting loss of Rs. 41,689. The Income-tax Officer noticed that there were two cash credits totalling Rs. 15,000 during the financial year ended on March 31, 1973. The Income-tax Officer enquired regarding the source, but the assessee agreed to the addition of the above sum as income from undisclosed sources. The Income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessee agreed for the assessment of undisclosed income, the Department has not brought on record any material to point out that there is any concealment on the part of the assessee. Thus, the Tribunal agreed with the Appellate Assistant Commissioner in cancelling the penalty levied under section 271(1)(c) of the Act. Before us, learned standing counsel appearing for the Department submitted that the fact that the assessee had agreed for the assessment of undisclosed income itself would be sufficient for the levy of penalty under section 271(1)(c) of the Act. In order to support this contention, reliance was placed upon a decision of this court rendered in the case of CIT v. Krishna and Co. [1979] 120 ITR 144. In the above decis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on March 3, 1976. According to the assessee, entries for a sum of Rs. 15,000 in the capital account were made by mistake by the accountant who was new to the job, that the assessee had made gifts of Rs. 10,000 and Rs. 5,000 each to his brother and wife and the accountant by mistake had recorded the same as cash credits. The assessee further pointed out that the tax effect was only Rs. 337 and that there was no mens rea warranting penalty. He further stated that he had not admitted that it was concealed income, but only agreed to the addition of Rs. 15,000 in the assessment. Apart from the acceptance of the assessee in making the addition under the head "Undisclosed income", there was no acceptance for bringing the undisclosed income as hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t applied the decision of the Bombay High Court in the case of Western Automobiles (India) v. CIT [1978] 112 ITR 1048. In that case also, the assessee agreed to the addition of a sum of Rs. 90,000. The legality of the penalty proceedings taken in respect of the concealment of the said sum came up for consideration by the Bombay High Court. The decision in CIT v. Anwar Ali [1970] 76 ITR 696 (SC) was cited and at page 1053, the Bombay High Court observed as follows : " It was held that the decision of the Supreme Court in Anwar Ali's case [1970] 76 ITR 696, was not applicable to a case where the addition was not by a mere rejection of the explanation of the assessee but on account of an admission of the assessee that the amounts may be adde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Assistant Commissioner imposed a penalty of Rs. 70,000 under section 271(1)(c) of the Income-tax Act, 1961 (prior to its amendment in 1964), finding that the debits were based on false claims. In relation to Rs. 21,700 the statement of one K who was not a contractor employed by the appellant in the relevant year but was employed in a later year was relied upon. On appeal, the Appellate Tribunal held (i) that not much turned upon the fact that the appellant had agreed to the additions of the amounts in assessment ; (ii) that K's statement had no bearing as he was not the contractor in the relevant year of account, (iii) that one A, who was a contractor in the year in question, had stated that he was responsible for the shortages, and that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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