2001 (10) TMI 15 - HC - Income Tax

From the facts it appears that the assessee was collecting on money over and above the printed price of cigarettes and was remitting the same to the principal company. It also appears that part of such collection was also utilised for advertisement purposes. The Assessing Officer himself observed in the assessment order that if such amount was passed over by the assessee to the parent company then the relief would be allowed to the assessee. The principal company has surrendered such amount which is evident from the order of the Settlement Com mission. The Tribunal on a consideration of the entire facts held that on money was collected by the assessee on behalf of the principal company which was business compulsion of the assessee. The Tribunal further found that the assessee has not concealed any part of his income for his own benefits. It is purely a finding on fact. No interference is called for by this court.

Summary

The High Court of Rajasthan rejected a reference application under section 256(2) of the Income-tax Act, 1961. The case involved an assessee firm dealing in cigarettes, where concealed income was found during a search operation. The Assessing Officer added the concealed amount to the total income, imposed a penalty, but the Tribunal overturned the penalty citing business compulsion and no concealment for personal benefit. The High Court upheld the Tribunal's decision, rejecting the reference application.