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Commissioner of Income-tax, U.P. Vs. Jhagru Ram Kunda Nand. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtAllahabad High Court
Decided On
Case Number Income-tax Reference No. 126 of 1967
Reported in[1972]86ITR823(All)
AppellantCommissioner of Income-tax, U.P.
RespondentJhagru Ram Kunda Nand.
Excerpt:
- - 65,000 may be a good ground for treating the entire deposits as the assessees income from undisclosed sources, so far as the assessment order is concerned. the observations of the tribunal set out above fall clearly within the law laid down by the supreme court in commissioner of income-tax v......an order under section 28(1)(c) of the income-tax act, 1922, levying a penalty of rs. 20,000. the assessee appealed. the appeal was, however, dismissed by the appellate assistant commissioner. thereafter, on second appeal by the assessee, the set aside the penalty observing :'coming to the facts of the present case, we may at once say that the material on record is insufficient to prove that the assessee either concealed the particulars of its income or deliberately furnished inaccurate particulars thereof so as to make it liable under section 28(1)(c). the sum of rs. 65,000 was treated as its income only because the evidence adduced by the assessee in support of its explanation was found unworthy of acceptance. the assessment of the said sum was thus based on inferences. the absence of.....
Judgment:

PATHAK J. - The Income-tax Officer made an assessment order for the assessment year 1945-46 including within the total income of the assessee an amount of Rs. 65,000 as the income of the assessee from undisclosed sources. On appeal by the assessee, the addition was maintained by the Appellate Assistant Commissioner and, thereafter, by the Income-tax Appellate Tribunal. The Income-tax Officer initiated penalty proceedings against the assessee and made an order under section 28(1)(c) of the Income-tax Act, 1922, levying a penalty of Rs. 20,000. The assessee appealed. The appeal was, however, dismissed by the Appellate Assistant Commissioner. Thereafter, on second appeal by the assessee, the set aside the penalty observing :

'Coming to the facts of the present case, we may at once say that the material on record is insufficient to prove that the assessee either concealed the particulars of its income or deliberately furnished inaccurate particulars thereof so as to make it liable under section 28(1)(c). The sum of Rs. 65,000 was treated as its income only because the evidence adduced by the assessee in support of its explanation was found unworthy of acceptance. The assessment of the said sum was thus based on inferences. The absence of reasonably convincing evidence regarding the source of the deposits of Rs. 65,000 may be a good ground for treating the entire deposits as the assessees income from undisclosed sources, so far as the assessment order is concerned. The evidence on record, in our opinion, is however insufficient to establish beyond reasonable doubt that the assessee actually earned that income and that it concealed the same. As there is no satisfactory evidence to establish positively that both the conditions of section 28(1)(c) are satisfactorily established, we hold the assessee not guilty of default under section 28(1)(c). We, therefore, set aside the order of penalty and allow the appeal.'

At instance of the Commissioner of Income-tax, the Tribunal has now referred the following question :

'Whether, on the facts and in the circumstances of the case, the assessee family committed a default liable to be punished under section 28(1)(c) of the Income-tax Act, 1922 ?'

It seems to us that the question referred is concluded by authority. The observations of the Tribunal set out above fall clearly within the law laid down by the Supreme Court in Commissioner of Income-tax v. Anwar Ali. The question is answered in the negative and in favour of the assessee. The assessee is entitled to its costs which we assess at Rs. 200. Counsels fee is also assessed at the same figure.

Question answered in the negative.


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