TMI Blog1984 (2) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... ollows : The assessee is a partnership firm carrying on the business of executing civil contracts. It was constituted by a deed of partnership, dated October 22, 1963. The first accounting year of the assessee ended on Diwali, i.e., 4th November, 1964, which was the previous year for the assessment year in question, i.e., 1965-66. In the relevant previous year, the assessee executed certain contracts as a sub-contractor of M/s. Raipur Provincial Engineering Company (hereafter referred to as the "principal contractors"). Some persons who were partners in the firm, M/s. Raipur Provincial Engineering Company, were also partners of the assessee-firm. The principal contractors had secured contracts from the Madhya Pradesh Electricity Board an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5, declaring therein income of Rs. 1,91,660. It was indicated in the return that profit on receipts of Rs. 19,16,602 was estimated at 15% i.e., at Rs. 2,87,490, and deducting therefrom a sum equal to 5% of the receipts (Rs. 95,830 under cl. (6) of the agreement) the net profit estimated was Rs. 1,91,660. In the course of the assessment proceedings, the ITO by his letter, dated January 19, 1968, required the assessee to file a certificate showing the amount of gross payments received by it. The assessee did not comply with this direction. The assessee also failed to comply with a notice given to it by the ITO under s. 143(2) of the I.T. Act. The ITO, therefore, made an assessment under s. 144 of the I.T. Act, estimating the income at Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ior to October 18, 1963 (reference to cl. (3) of the agreement between the assessee and the principal contractors). The other omission was of a sum of Rs. 1,50,000 referable to the security advance. The ITO framed a fresh assessment under s. 143(3) of the Act, by order dated March 7, 1970. The income was determined at Rs. 5,53,546. The ITO recorded that action for imposing penalty was being initiated (order dated March 7, 1970, is annex. A). As the minimum penalty imposable exceeded Rs. 1,000, the ITO referred the case to the AAC. The assessment was reduced in appeal by Rs. 5,000 but the inclusion of receipts of Rs. 3,83,529 and Rs. 1,50,000 in the computation of income became final. In fact, the assessee itself had included these sum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of the statute itself. In CIT v. Smt. Anusuya Devi [1968] 68 ITR 750, the Supreme Court went to the extent of observing that the High Court may decline to answer a question of fact even if the question has been referred at the instance of the High Court under s. 256(2) of the Act. The order of the Appellate Tribunal (annex. C of the statement) has dealt with the contention of the assessee with respect to imposition of penalty. In para. 15, the Tribunal observed : " However, from the course of events which we have stated earlier, it is manifest that the assessee, which was clearly aware that the receipts included two sums of Rs. 3,83,529 and Rs. 1,50,000, had omitted to declare any corresponding profit in the estimate of income decl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finding if it appears that either the Tribunal has misunderstood the statutory language, because the proper construction of the statutory language is a matter of law, or it has arrived at a finding based on no evidence or where the finding is inconsistent with the evidence or contradictory, or it has acted on material partly relevant and partly irrelevant or where the Tribunal draws upon its own imagination and imports facts and circumstances not apparent from the record or bases its conclusions on mere conjectures or surmises or where no person judicially acting and properly instructed as to the relevant law could have come to the determination reached. Applying these guidelines to the order passed by the Tribunal, it becomes clear that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It was also submitted that there was no actual receipt but only a transfer by book entries. Therefore, according to him, there was no concealment in the relevant accounting year. The contention was raised before the Tribunal also and rightly rejected. The agreement between the assessee and the principal contractors, dated October 25, 1963, itself shows that some work had been executed by the principal contractors prior to the agreement in question and the assessee was entitled to the receipts which the principal contractors had obtained for the work executed by them up to October 18, 1963. Moreover, the assessee itself admitted these receipts while filing the revised return and, therefore, this glaring inconsistency in the explanation and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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