TMI Blog1980 (7) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... ----------------------- S. No. Name of the party Amount --------------------------------------------------------------------------------------------------------------------------------------------------- Rs. 1. M/s. Mohandas Ghanshamdas, Majith Mandi, Amritsar 15,000 2. M/s. Brijlal Narinder Kumar, Tunda Talab, Amritsar 20,000 3. M/s. Tola Singh Sohan Singh, Majith Mandi, Amritsar 13,000 4. M/s. Chopra Trading Co., Majith Mandi, Amritsar 18,000 5 . M/s. Avtar Singh Bros., Majith Mandi, Amritsar 10,000 6. M/s. United Trading Co., Majith Mandi, Amritsar 50,000 ---------------- Total 1,26,000 ---------------- The assessee produced the confirmatory letters from the parties concerned to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been reopened. The assessee-firm appeared before the ITO and submitted a return of Rs. 84,949, i.e., the figure at which the assessment has earlier been framed. The assessee-firm asserted that the loans in question were genuine and that all the material facts had been disclosed by it to the ITO and that there was no justification for the reopening of the assessment under s. 147(a) of the Act. The ITO rejected these assertions and on the merits of the case added a sum of Rs. 76,359 (including Rs. 359 as interest) to the income of the assessee-firm from undisclosed sources. The assessee-firm went up in appeal before the AAC, which was dismissed. The assessee-firm went up in second appeal which was partly allowed and it was held by the T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... name of M/s. Tola Singh Sohan Singh was not accepted because the assessee could not produce any satisfactory evidence to substantiate its contention. The explanation of the assessee was rejected by the Tribunal for want of evidence. This fact alone is not, in our opinion, sufficient to justify the levy of penalty. The addition of Rs. 13,000 having been made to the income of the assessee merely by rejecting its explanation, it cannot be said that the assessee concealed its income within the meaning of section 271(1)(c). We are, therefore, of the view that penalty is not leviable in respect of this cash credit of Rs. 13,000." The position as regards the cash credit of Rs. 15,000 appearing in the name of M/s. Mohandas Ghanshamdas is, however ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... corded on December 21, 1965, and January 15, 1966, and also his statement in the assessment proceedings, the department levied a penalty of Rs. 27,937 on the assessee and the High Court upheld the same. While upholding this penalty, the High Court observed that the conduct of the so-called creditor, Shri Mohandas, was that he was lending his name to different traders as a creditor in order to enable them to escape liability to income-tax and that there was, unlike in the case of Anwar Ali [1970] 76 ITR 696 (SC), satisfactory material on record to prove the concealment of income. The present case is on stronger footing, because whereas Shri Mohandas had supported the claim of M/s. Jawahar Woollen Textile Mills in the assessment proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arise between the same parties and involve common questions of law and fact, they are being disposed of by one judgment. In the reference wherein the quantum of tax imposed has been challenged, the only point raised by the learned counsel for the assessee-firm is that the names of the hundi dealers having been given by the assesseefirm in the original return there was no justification on the part of the ITO to reopen the assessment under s. 147(a) of the Act. However, the decision on this point stands concluded against the assessee-firm by a Division Bench judgment of this court in Kirpa Ram Ramji Dass v. ITO (Civil Writ No. 3671 of 1971 decided on November 20, 1979-since reported in [1982] 135 ITR 68.) As far as the second point is co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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