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Issues:
1. Penalty under section 28(1)(c) on partners of a firm post dissolution. 2. Concealment of income or furnishing inaccurate particulars. 3. Treatment of specific sum as concealed income for penalty imposition. Analysis: *Issue 1: Penalty on partners of a dissolved firm* The court referred to a Supreme Court decision affirming that a penalty under section 28(1)(c) of the Income-tax Act can be imposed on partners of a firm even after its dissolution. The court ruled in favor of the department based on this precedent. *Issue 2 & 3: Concealment of income and specific sum treatment* The case involved an assessment for the year 1950-51, with a disputed sum of Rs. 79,500 not included in the return. The penalty was levied under section 28(1)(c) for this amount, comprising three components: Rs. 30,000 credited to partners, Rs. 10,000 to one partner, and a difference of Rs. 39,500 in building cost estimation. The court emphasized the burden of proof on the department in penalty proceedings, likening them to criminal proceedings. For the Rs. 30,000 component, the court found no evidence of concealment or inaccurate particulars, ruling in favor of the assessee. However, for the Rs. 10,000 credited to one partner, the court upheld the penalty imposition, considering the accrual of profits and supporting evidence. Regarding the building cost difference, the court accepted the department's estimation of Rs. 39,500 based on rental value and construction quality, rejecting the assessee's engineer's valuation. The court concluded by ruling in favor of the assessee for Rs. 30,000 but in favor of the department for Rs. 10,000 and Rs. 39,500. In conclusion, the court answered the questions accordingly, providing a detailed analysis of each component of the disputed sum and upholding the penalty for specific items while ruling in favor of the assessee for others.
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