TMI Blog1981 (12) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... kept by the assessee, it was explained that the monies had come from out of the savings from his agricultural income. It was also explained that dividends from shares which had not been brought into the books also accounted for a portion of the investments. In addition, the assessee explained that whenever his wife or sons travelled from Ceylon to India, they brought into India remittances of monies not disclosing them to the foreign exchange authorities in either country. The explanations were not believed by the ITO. He held that of the total investments of the value of Rs. 1,05,850 which were made by the assessee during the relevant account year both in his name and in the names of his wife and son, the assessee was in a position to exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... investments. According to the IAC, the ITO had failed to give further credit to agricultural income of Rs. 8,000 and dividend income of Rs. 24,961. He further held that after setting off Rs. 15,000 as household expenses a net sum of Rs. 17,961 must be given credit to, for the purpose of ascertaining what the balance of unexplained source for investment made by the assessee was. In this re-estimation of the availability of funds with the assessee for making investments, the IAC arrived at figure of Rs. 30,000 as the value of the investments for which the assessee's explanation fell short. Since there was thus an estimated shortfall of Rs. 30,000 in the sources of investment made by the assessee, the IAC concluded that this must be regarded a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were proved to be false, the mere falsity of the explanations given by the assessee could not give rise to the inference that the amount added in the assessment must represent his income. The Tribunal referred to, and followed, the decision of the Supreme Court in CIT v. Anwar Ali [1970] 76 ITR 696 and held that it was for the Revenue to establish that the falsity of the explanation of the assessee as to the sources of investment really represented taxable income which was concealed from the view of the Department. The Tribunal held that, in the instant case, the Department had not established that the explanation offered by the appellant was either false or was unacceptable., They pointed out that the Department had not even established t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neglect the presumption against the assessee must be held to have stuck to him. On this basis, the learned standing counsel submitted that the penalty ought properly to have been sustained by the Tribunal. Learned counsel further submitted that there was no discussion in the order of the Tribunal as to the applicability of the Explanation to the facts of the present case. We do not think that we should accept the learned counsel's finding fault with the Tribunal for not applying the Explanation to s. 271(1)(c) of the Act in so far as the present case is concerned. We have summarised the basis on which the order of assessment was passed against the assessee. We have also briefly set out the reasonings of the IAC in his order, levying pena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment as well as penalty go to show that it was the endeavour of the Department to reconstruct the financial accounts of the assessee on the basis of what they considered to be a fair estimate, and from that seek to analyse and find out what would be the financial sources from out of which the various investments made by the assessee during the year could properly be explained. In such a situation, therefore, the Tribunal felt that the whole thing was built on estimates, and there was no evidence whatever in support of the theory that the assessee bad concealed particulars of his income. The Explanation to s. 271(1)(c) seems to have been farthest from the mind of the Department both when the IAC acted and at the time of the hearing of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect, from the Orissa High Court. Whatever might be the position of the AAC, as an appellate authority, so far as the Tribunal is concerned, they are not strictly an I.T. authority, in the sense that they are an integral part of the I.T. Dept. On the contrary, by their constitution, powers and jurisdiction, not to speak of the manner of their recruitment, the Tribunal are an independent arbitral tribunal. The proceedings before them are adversary proceedings in which the Department, on the one side, and the assessee on the other face each other as opposing parties. In such a situation, the Tribunal have to decide only those issues which are properly raised before them by the one or the other party in the appeal or in the cross-objections. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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