TMI Blog1994 (2) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... ller figure of concealed income. He noted that Rs. 14,03,311 was the gross income but the penalty should be quantified with reference to the net income. He had noted that expenses of Rs. 7,00,110 related to the said gross income of Rs. 14,03,311 and consequently he noted that the penalty was leviable with reference to the net income of Rs. 7,03,201 (Rs. 14,03,311 minus Rs. 7,00,110). The assessee is aggrieved even by this order. It is pointed out that as a result of the order of the CIT(A) the penalty amount is reduced to Rs. 5,54,570 but according to the assessee it was not a fit case for levy of penalty under section 271(1)(c) at all. 2. Basic facts may be noted first. The assessee-company is engaged in the business of transportation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e CIT(A) in appeal had held that expenses relatable to the income receivable should be deducted for arriving at the concealed income and penalty should be quantified accordingly. 3. Before proceeding to narrate and consider the submissions, it would be beneficial to take note of variations in the figures of different items, as follows :-- (i) For gross income receivable; as already noted assessment order (vide para 4) dated 29-4-1992 mentioned the figure of Rs. 13,60,883. The penalty order dated 28-9-1992 took the corresponding figure at Rs. 14,03,311 and we were told that this was the correct figure. (ii) For expenses relatable to that income the assessment order mentioned the figure of Rs. 7,00,110 (vide para 4) but we are now told ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... now in penalty proceedings he was entitled to claim that the value of the work which remained uncertified by the same authorities cannot be regarded as income accrued even on mercantile system of accounting. He submitted that the assessee had co-operated with the department by not only filing the revised return but by accepting the assessment. He emphasised that department had not proved that there was any concealment or furnishing of inaccurate particulars. According to him, it was only a bona fide difference of opinion and at any rate there were many other items which had been wrongly included in the total income. He submitted that in the account books for the subsequent year, the entries to the corresponding sum of Rs. 14,03,311 had been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 120 ITR 752 (Guj.). 7. Sir Shadilal Sugar General Mills Ltd. v. CIT [1987] 168 ITR 705 (SC). III. 'Incomes' in question not shown under bona fide belief. 8. Hindustan Steel Ltd. v. State of Orissa [1972] 83 ITR 26 (SC). 9. Cement Marketing Co. of India Ltd. v. Asstt. CST [1980] 124 ITR 15, 18 (SC). IV 'Revised return' to be considered alongwith conduct and all circumstances :-- 10. CIT v. K. Mahim [1984] 149 ITR 737 (Ker.) 11. D.V. Patel Co. v. CIT [1975] 100 ITR 524 (Guj.). V. Effect of deletion of word 'deliberately' from 1-4-1964. 12. Bakshi Mohd. Yusuf and Bakshi Mohd. Shafi v. CIT [1974] 93 ITR 38 (J K). Explaining the position, he distinguished the Allahabad High Court decision in the case of Rukmani Bahu v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt decision in the case of CIT v. Dr. A.K. Sharma [1993] 204 ITR 62. He submitted further that the CIT(A) had distinguished the instant case from the decisions which were cited before him on behalf of the assessee, viz., CIT v. Anwar Ali [1970] 76 ITR 696 (SC), CIT v. Khoday Eswarsa Sons [1972] 83 ITR 369 (SC) and Sir Shadilal Sugar General Mills Ltd.'s case and had relied on the Allahabad High Court in the case of Rukmani Bahu and Patna High Court Full Bench decision in Nathulal Agarwala Sons' case. He also cited the following three other decisions : 1. CIT v. Mansa Ram Sons [1977] 106 ITR 307 (All.) 2. CIT v. Prabhat Bakery [1979] 118 ITR 35 (Mad.) 3. CIT v. T.K. Manicka Gounder [1989] 178 ITR 274 (Mad.). 8. In reply, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er and the CIT(A) are obviously much more (i.e., about 10 to 20 times more) than the amounts of difference in incomes returned and assessed. The reason is not far to seek. The assessee had omitted to include income in the original return but had committed countervailing errors of including other items which were not really taxable. That is how the difference of income receivable taken at about Rs. 14 lakhs (Rs. 14,03,311) got really reduced, and ultimately income finally assessed was Rs. 13.44 lakhs against originally returned income shown at Rs. 12.67 lakhs. The point is that actually there were many omissions and mistakes in the originally filed return of income. Because of some of them income returned looked low but because of others it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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