TMI Blog1987 (3) TMI 142X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 70,000 and sales during that period were around Rs. 20,000. The closing stock had been declared are Rs. 44,983. Even if it was presumed that there was no opening stock, the closing stock should have been valued at around Rs. 54,000. The assessee could not explain this discrepancy and ultimately agreed for an addition of Rs. 16,000. On this basis, the ITO initiated the penalty proceedings under s. 271(1)(c) of the Act and issued a show cause notice. The assessee's plea was that the assessee had agreed to the addition to end litigation. He was an illiterate person and was not conversant of the repercussion of his admission in relation to the liability for penalty. The ITO, however, was of the opinion that the addition had been agreed to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee that he had purchased the goods worth Rs. 27,279 prior to Jan., 1980, but the bill thereof was actually received by him in March, 1980, had been found to be without substance, therefore, the concealment had been proved beyond doubt. After carefully considering all the facts and circumstances we are of the opinion that there is no substance in this contention. It is not that in every case of agreed addition, there is necessarily a concealment. For instance, in Sohiner Singh and Bros. vs. CIT, Amritsar (1979) 9 CTR (P H) 23 : (1980)121 ITR 834 (P H), the assessee had been asked to explain as to how an overdraft had been obtained against the security of stock, while no such stock had been shown in the books of account. The explanation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be levied, otherwise the assessee would never have agreed to the addition. The ITO had not been able to substantiate the addition by pointing out any unexplained instance of sale or purchase. The addition had been made on surmises and conjectures only and there was nothing to show that the addition in question constituted the concealed income of the assessee and apart from the absence of proof of the explanation given by the assessee, the Department had no cogent reasons of evidence on which it could be inferred that the assessee had consciously concealed the particulars thereof. The AAC appears to have accepted all these contentions. The only point made out by the representative of the assessee, that in fact he had purchased goods to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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