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TMI Blog1976 (2) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 36,346 by the AAC. A further deduction of Rs. 20,000 was granted by the Tribunal in ITA No. 1494 (Ahd)/71-72, decided on 20th Oct., 1973. 3. The ITO after completing the assessment initiated action for levy of penalty under the provisions of s. 271(1)(c) of the Act and referred the matter to the IAC as the minimum penalty imposable exceeded Rs. 1,000. The IAC for the reasons set out in his order imposed the aforesaid penalty. 4. Being aggrieved the assessee has come up in appeal before us. In order to appreciate the controversy before us it is necessary to point out the facts in a little more detail. 5. The assessee firm deals in purchase and sale of land. It purchased 23,113 sq.yds. of land in Samvat years 2020 and 2021 at the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n on behalf of the assessee, Shri Krishnaprasad stuck to his guns. The ITO also examined Shri J.C. Vora, the Advocate and the legal adviser of the firm, who is stated to have made the impugned payment in presence of witnesses. On examination of the witnesses, it was found that there was no evidence to support the plea taken by the assessee that the impugned payment was in fact made to Shri Krishnaprasad. In these circumstances, the ITO disallowed the claim. (ii) The next item of disallowance relates to a sum of Rs. 15,000 paid to Shri Keshavji Amthahi Vagri (hereinafter referred to as "Shri Vagri"). This amount was stated to have been paid to the said party for vacating the hut situated on the open land. The assessee was unable to produce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l as by deposition. He also vacated the disallowance in respect of the payment made to Shri Manilal amounting to Rs. 5,500. This decision of the AAC was challenged in appeal before the Tribunal in ITA Nos. 1494 and 1542 (Ahd) of 1971-72. The Tribunal upheld the decision of the AAC. While upholding the addition of Rs. 80,000 paid to Shri Krishnaprasad the Tribunal at paragraph 7 of its order observed as follows:— "The foregoing facts clearly show that Krishnaprasad had clearly denied the receipt of the amount and in his cross-examination, he struck to his guns. there is some reference about the kachcha receipt alleged to have been passed by Shri Krishnaprasad, in one deposition made by Shri Khushal Das, but kachcha receipt is not available ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n which he stuck to his guns, we are not persuaded to reach to a conclusion different then the one reached by the authorities below, on this point. We would, therefore, uphold the disallowance made by the authorities below." 7. Shri Bhatt, learned representative of the assessee urged before us that the levy of penalty in the instant case was not justified; firstly on the ground that there no was substantial evidence to hold that the payment made to Shri Krishnaprasad was not a genuine payment. He referred to the depositions made by various parties which the Tribunal had the occasion to consider in quantum appeal cited supra. Shri Bhatt next pointed out that as the assessee had submitted nil return, there was no question of levying any pen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esent proceedings. Therefore, the finding of the fact reached by the Tribunal that the impugned payment was not a genuine payment must also govern the present proceedings. In this view of the matter we uphold the action of the authorities below in levying the penalty under the provisions of s. 271(1)(c) of the Act. However, we find that Shri Bhatt on stronger ground so far as the alternative contention is concerned, in the instant case the original return was filed on 28th July, 1968. Therefore, the basis of levy of penalty should be with reference to the provisions of s. 271(1)(c) of the Act as they stood prior 1st April, 1968. We accordingly direct that in the instant case the penalty should be levied at the rate of 20 per dent of amount ..... X X X X Extracts X X X X X X X X Extracts X X X X
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