TMI Blog1978 (4) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of the case relates to the assessment year 1964-65, the relevant accounting year ending on December 31, 1963. In the course of of the assessment proceedings the ITO found that there was a cash credit of Rs. 50,000. The assessee's case was that it was a loan from Berlia Cloth Stores which belonged to one Ramchandra Berlia. The I.T.O. was not satisfied with the genuineness of the loan and issued a summons under s. 131 on Shri Berlia and, as he was out of Calcutta, his employee, Shri Masudilal Agarwalla, gave evidence before the ITO. The evidence of Shri Masudilal Agarwalla is as follows: He was the sole employee of Mr. Berlia ; his salary was Rs. 150 per month, he and Mr. Berlia lived in that shop; no books were maintained by the shop; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ine and the aforesaid amount was the assessee's concealed income from undisclosed sources. He also held that the assessee had deliberately filed an incorrect return and accordingly he imposed a penalty of Rs. 38,099. The assessee filed an appeal from the penalty order. The departmental representative argued before the Tribunal that the Explanation under s. 271(1)(c) of the Act was applicable in the instant case. The Explanation runs thus: "Where the total income returned by any person is less than eighty per cent. of the total income (hereinafter in this Explanation referred to as the correct income) as assessed under section 143 or section 144 or section 147 (reduced by the expenditure incurred bona fide by him for the purpose of makin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce which is negative cannot be treated as conclusive as far as penalty proceedings are concerned. We are of the opinion that after the decision of their Lordships of the Supreme Court in [1970] 76 ITR 696 (CIT v. Anwar Ali) it has been clarified that only because an addition has been made to the income of the assessee, it would not justify the imposition of penalty. In our view the position would stand even after the introduction of the Explanation to section 271(1)(c)." Mr. N. K. Poddar, learned advocate for the assessee, argues before us that the case of the CIT v. Anwar Ali [1970] 76 ITR 696 (SC), relied on by the Tribunal, still holds the field. He urges that the assessee cannot establish a negative. He submits that fraud, gross or wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was guilty of concealment of income or has furnished inaccurate particulars of income. In our opinion the Tribunal was entirely wrong in its understanding of the Explanation. The entire approach of the Tribunal is also erroneous, because a confirmatory letter does not prove the creditworthiness of a creditor which must be proved as a fact by an assessee. The Tribunal has further failed to appreciate the relevant facts found by the authorities below. In these circumstances and as submitted by the learned advocates for both the parties, we send back this matter to the Tribunal without answering the question with a direction that after giving a reasonable opportunity to both the parties of being heard, the Tribunal shall decide afresh whet ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
