TMI Blog1996 (1) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... 0,000 in the name of one Sri Gopal Mudaliar. The assessee filed a confirmatory letter from Gopal Mudaliar in support of the loan of Rs. 10,000 taken from him. In the course of the enquiries made by the Income-tax Inspector, Gopal Mudaliar denied having advanced any loan to the assessee. Thereafter, on February 18, 1974, the assessee filed a revised return stating that in the absence of documentary evidence to prove the loan taken from Gopal Mudaliar, the amount of Rs. 10,000 is offered as income for assessment. The Income-tax Officer initiated penalty proceedings under section 271(1)(c) of the Act. According to the Income-tax Officer, the assessee filed a revised return after the Department started enquiry and found that the credit was not a genuine, one. Since the assessee furnished inaccurate particulars of its income in the original return filed on March 17, 1972, penalty was levied under section 271(1)(c) to the extent of Rs. 10,000. On appeal, the Appellate Assistant Commissioner confirmed the penalty levied by the Income-tax Officer. Aggrieved, the assessee filed a second appeal before the Tribunal. The Tribunal allowed the assessee's appeal and cancelled the penalty of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n disclosing the cash credit found in the name of Gopal Mudaliar. Further, according to the Department, the fact that the said Gopal Mudaliar later on denied having advanced any amount to the assessee would not in any way absolve the assessee from levy of penalty under section 271(1)(c) of the Act. Therefore, the assessee deliberately concealed the particulars or furnished inaccurate particulars in the return, warranting penalty under section 271(1)(c) of the Act. Learned senior standing counsel placed reliance on a decision of this court in CIT v. J. K. A. Subramania Chettiar [1977] 110 ITR 602 in order to support his contention that merely filing a revised return before completing the assessment would not absolve the assessee from levy of penalty under section 271(1)(c) of the Act. According to the facts arising in the abovesaid decision, for the assessment year 1963-64, the assessee filed a return of income on March 16, 1964, disclosing a total income of Rs. 27,566, which included a business income of Rs. 21,665. Subsequently, on February 7, 1968, the assessee filed a second return of income for the same year, disclosing a total income of Rs. 75,044, which included a business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Textiles [1992] 193 ITR 361. According to the facts arising in this decision, the assessee, who carried on a business including export of art silk fabrics, handloom cloth, handicrafts, etc., filed returns for the assessment years 1962-63 to 1964-65 disclosing in some cases loss and in some others marginal incomes based on accounts maintained by them. Some time in January, 1965, there was a raid on the business premises of most of the assessees by the Economic Offences Wing. Thereafter, in May, 1965, the assessee came forward with certain disclosures under section 68 of the Finance Act, 1965. Later, the assessees purported to file revised returns. In the revised returns also, the assessees had not disclosed the correct particulars of income and had suppressed profits. Subsequent to the revised returns, the assessees offered further amounts for assessment. The Income-tax Officer also found that the assessees had suppressed the sale of import licences and the profits derived from them. Therefore, the Income-tax Officer imposed penalty, but it was cancelled by the Tribunal on the grounds that the assessees had filed revised returns, the incomes had been estimated and that the charge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts of the present case. Therefore, this decision rendered by this court would not help the Department to support its case. Reliance was also placed upon the decision in CIT v. K. Mahim [1984] 149 ITR 737 (Ker). According to the facts arising in that case, the assessment of the assessee for the relevant assessment year was reopened by the Income-tax Officer and detailed enquiries were pursued in respect of the same. The assessee, however, filed a revised return voluntarily and the assessment was completed by the Income-tax Officer on that basis. Thereafter, the Income-tax Officer issued notice to the assessee under section 271(1)(c) of the Act for concealment of income and referred the matter to the Inspecting Assistant Commissioner. The assessee contended before the Inspecting Assistant Commissioner that inasmuch as he had filed the revised return voluntarily and that the assessment had been completed on the basis of such revised return, the levy of penalty would be invalid as no concealment could be established with reference to the revised return. The Inspecting Assistant Commissioner rejected the contention of the assessee and imposed penalty on him. On appeal, the Tribunal c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... readily agreed to the inclusion of the amount as his income, the levy of penalty was justified. Therefore, it remains to be seen that the assessee accepted that the amount represented his own income and agreed to the inclusion of the amount as his income. But, in the present case on hand, the assessee never agreed that the cash credit belongs to him. According to the assessee herein, since it was unable to prove that the cash credit belongs to one Gopal Mudaliar, the assessee had no other option but to offer the said amount for tax. Further, the hawala transaction is entirely different and distinct from the practice of entering a cash credit in the account books in the name of a third party. Therefore, the abovesaid decision is also distinguishable on facts. According to the facts arising in the present case, in the original return, the cash credit of Rs. 10,000 was not disclosed. The cash credit is standing in the name of one Gopal Mudaliar. The assessee possessed a confirmatory letter from the said creditor. Therefore, the assessee was under the bona fide impression that there is proof for establishing that this sum of Rs. 10,000 was advanced by the creditor. The assessee came ..... X X X X Extracts X X X X X X X X Extracts X X X X
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