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Commissioner of Income-tax, Delhi-i, New Delhi Vs. M/S. Hansraj Gupta and Co. (P.) Ltd. Delhi. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtAllahabad High Court
Decided On
Case NumberI.T.C. No. 60 of 1976
Reported in(1976)5CTR(All)0169A
AppellantCommissioner of Income-tax, Delhi-i, New Delhi
RespondentM/S. Hansraj Gupta and Co. (P.) Ltd. Delhi.
Cases ReferredWest Bengal vs. Anwar Ali
Excerpt:
- - 23,774/-.but, the income-tax officer made several additions on account of (a) expenses claimed by the assessee assessment bad debts, repairs and travelling expenses (b) unexplained deposits amounting to rs. 5. as regards bad debts amounting to rs. 6. as regards certain disclosure said to have been made by the depositors, the tribunal held that the parties were genuine, and further observed that at the most it could be said that the assessee failed to furnish sufficient evidence in support of the deposits, but that could not be a ground for levy of penalty under section 271(1)(c) of the income-tax act in view of the decision of the supreme court in commissioner of income-tax act in view of the decision of the supreme court in commissioner of income-tax, west bengal vs......by the i.a.c.2. the assessee is m/s. hansraj gupta & co. (p) ltd. it filed a return showing its income assessment rs. 23,774/-. but, the income-tax officer made several additions on account of (a) expenses claimed by the assessee assessment bad debts, repairs and travelling expenses (b) unexplained deposits amounting to rs. 97,000/- and (c) interest on the said deposits amounting to rs. 5,105/-. he assessed the total income at rs. 2,96,688/-. he also took action under section 271(1)(c) of the income-tax for concealment and furnishing inaccurate particulars of income and referred the case to the inspecting assistant commissioner assessment the minimum penalty leviable exceeded rs. 1,000/-.3. the inspecting assistant commissioner observed that the assessee company had not given any.....
Judgment:
ORDER

T. V. R. Tatachari, C.J. - This is an application under section 256(2) of the Income-Tax Act, 1961, filed by the Commissioner of Income-tax, Delhi-I, New Delhi, praying that the Income-tax Tribunal be required to state the case and refer the following question stated to arise out of the order of the said Tribunal, dated 4th February, 1975, in Income-tax Appeal No. 870 of 1972-73 relating to the assessment year 1965-66 :-

'Whether on the facts and circumstances of the case the Tribunal was legally correct in holding that no penalty was leviable of the assessee company under the Explanation to section 271(1)(c) of the Income-tax Act, 1961 and thereby cancelling the penalty of Rs. 70,000/- imposed by the I.A.C.

2. The assessee is M/s. Hansraj Gupta & Co. (P) Ltd. It filed a return showing its income assessment Rs. 23,774/-. But, the Income-Tax Officer made several additions on account of (a) expenses claimed by the assessee assessment bad debts, repairs and travelling expenses (b) unexplained deposits amounting to Rs. 97,000/- and (c) interest on the said deposits amounting to Rs. 5,105/-. He assessed the total income at Rs. 2,96,688/-. He also took action under section 271(1)(c) of the Income-tax for concealment and furnishing inaccurate particulars of income and referred the case to the Inspecting Assistant Commissioner assessment the minimum penalty leviable exceeded Rs. 1,000/-.

3. The Inspecting Assistant Commissioner observed that the assessee company had not given any evidence to prove that certain cash credits amounting to Rs. 85,000/- and interest of Rs. 4,555/- thereon were genuine, that the only explanation furnished by the assessee was that the said cash credits (loans) were taken on hundis from Calcutta parties and no evidence could be produced about their genuineness on account of the disturbed conditions in Calcutta at the relevant time. In that view, the Inspecting Assistant Commissioner held that so far assessment the said cash credits of Rs. 85,000/- and the interest of Rs. 4,555/- are concerned, the assessee had offered no explanation to prove the nature and source of those credits, and that they have, therefore, been rightly treated as the assessees concealed income in view of the provision in the Explanation to Section 271(1)(c) of the Income-tax Act. In the result, he levied a penalty of Rs. 70,000/-.

4. On appeal by the assessee, the Tribunal held that in respect of credits amounting to Rs. 45,000/- the Appellate Assistant Commissioner, by an order dated 28th March, 1972, in the assessees assessment appeal No. 345 of 1971-72, had already deleted the additions inasmuch as the assessee had been able to produce certificates confirmation letters in respect of the same. As regards three other cash credits, though the Tribunal, by its order in I.T.A. No. 1548 and 1073 of 1972-1973, had confirmed the additions made by the Income-Tax Officer, it observed in the penalty appeal that the said three credits had been confirmed on an erroneous view that the deposits of the persons concerned who belonged to Calcutta were effected at Delhi, that as a matter of fact, on going through the books of the Calcutta Branch office and not in the books of the Delhi Head Office.

5. As regards bad debts amounting to Rs. 80,000/- and Rs. 18,936/-, the Tribunal observed that the Explanation to section 271(1)(c) was not applicable to the facts and circumstances of the case as they had been remanded back to the Appellate Assistant Commissioner for reconsideration.

6. As regards certain disclosure said to have been made by the depositors, the Tribunal held that the parties were genuine, and further observed that at the most it could be said that the assessee failed to furnish sufficient evidence in support of the deposits, but that could not be a ground for levy of penalty under section 271(1)(c) of the Income-tax Act in view of the decision of the Supreme Court in Commissioner of Income-tax Act in view of the decision of the Supreme Court in Commissioner of Income-tax, West Bengal vs. Anwar Ali; 76 Income-tax Reports, 696.

7. In the result, the Tribunal allowed the appeal filed by the assessee and cancelled the penalty.

8. It is clear from the above the Tribunal, on a consideration of the facts and circumstances of the case, held that the assessee could not be said to have concealed the particulars of such income within the meaning of section 271(1)(c) of the Act. It is obvious that no question of law can be said to arise out of the impugned order of the Tribunal. The Tribunal was quite justified in dismissing the application filed by the Revenue under section 256(1) of the same reasons we also decline to direct the Tribunal to state the case and refer the proposed question to this Court. Income-tax Case No. 60 of 1976 is dismissed in limine.


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