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Addl. Commissioner of Income-tax Vs. Jeewandas Gyanchand - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtMadhya Pradesh High Court
Decided On
Case NumberMiscellaneous Civil Case No. 83 of 1979
Judge
Reported in[1983]144ITR881(MP)
ActsIncome Tax Act, 1961 - Sections 271(1)
AppellantAddl. Commissioner of Income-tax
RespondentJeewandas Gyanchand
Appellant AdvocateB.K. Rawat, Adv.
Respondent AdvocateO.P. Namdeo, Adv.
Cases Referred(see Hansraj Aggarwal v. Add.
Excerpt:
.....it cannot be said that onus shifts exclusively and heavily on him to prove his innocence. conviction of appellant is liable to be set aside. - 3. as the income returned was less than 80% of the income assessed, the explanation to section 271(1)(c) was clearly attracted (see hansraj aggarwal v......admission. the question whether the act of an assessee in agreeing to a particular, figure of income for assessment purposes amounts to an admission depends upon the circumstances of each case. this question was considered by a division bench of this court in addl. cit v. bhartiya bhandar : [1980]122itr622(mp) . this is not a case where the assessee had filed a revised return admitting certain items of income which were not disclosed earlier. this appears to be a case where the assessee agreed to thefigure of income assessed by the ito to purchase peace. the assessment on the agreed basis cannot, in our opinion, be taken to be an admission. 4. for these reasons, we answer the questions referred as follows : (1) the appellate tribunal was not right in law in holding that the explanation.....
Judgment:

G.P. Singh, C.J.

1. This a reference made by the Tribunal as directed by this court in Misc. Civil Case No. 708 of 1972, decided on 4th May, 1978. The questions of law referred are as follows :

'(1) Whether the Appellate Tribunal was right in holding that the provisions of the Explanation to Section 271(1)(c) were not attracted to the facts and circumstances of the case

(2) Whether the Appellate Tribunal was justified in holding that there was no material on record to show that the assessee was guilty of fraud or gross or wilful negligence ?'

2. The reference relates to the assessment year 1968-69. For this assessment year, the assessee returned an income of Rs. 24,397. The ITO rejected the accounts of the assessee and assessed the income at Rs. 35,913 on agreed basis. Thereafter, the IAC, to whom the penalty case was referred, imposed a penalty of Rs. 13,000 under Section 271(1)(c). The Tribunal, in the appeal filed by the assessee, deleted the said penalty.

3. As the income returned was less than 80% of the income assessed, the Explanation to Section 271(1)(c) was clearly attracted (see Hansraj Aggarwal v. Add. CIT : [1979]119ITR688(MP) ). The next question is whether the assessee could be said to have rebutted the presumption arising under the Explanation. We have already stated that the assessment was made after rejecting the books of account. No particular item in the books of account was found to be false. Further, it has not been shown that any specific item of income has not been entered in the books of account. In these circumstances, in our opinion, the assessee succeeded in rebutting the presumption arising under the Explanation. The learned counsel for the Department submitted that as the assessee had agreed to the assessment made by the ITO, it must be held that this amounted to an admission and the presumption cannot be said to be rebutted because of this admission. The question whether the act of an assessee in agreeing to a particular, figure of income for assessment purposes amounts to an admission depends upon the circumstances of each case. This question was considered by a Division Bench of this court in Addl. CIT v. Bhartiya Bhandar : [1980]122ITR622(MP) . This is not a case where the assessee had filed a revised return admitting certain items of income which were not disclosed earlier. This appears to be a case where the assessee agreed to thefigure of income assessed by the ITO to purchase peace. The assessment on the agreed basis cannot, in our opinion, be taken to be an admission.

4. For these reasons, we answer the questions referred as follows :

(1) The Appellate Tribunal was not right in law in holding that the Explanation to Section 271(1)(c) was not attracted.

(2) In the circumstances of the case, the presumption arising from the Explanation can be said to be rebutted and, therefore, the Tribunal could be said to be right in saying that there was no material to show that the assessee was guilty of concealment.

5. There will be no order as to costs of this reference.


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