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Issues:
1. Whether there was evidence to support the finding of clear concealment of income under section 271(1)(c)? 2. Whether the provisions of section 271(1)(c) were rightly applied to the declared amount of income? Analysis: The case involves a reference under section 256(2) of the Income Tax Act, 1961, concerning the assessment year 1962-63. The assessee declared a total income of Rs. 15,235, with a significant amount of Rs. 1,24,881 shown as exempt winnings from horse race betting. However, the Income Tax Officer (ITO) noticed credits totaling Rs. 1,45,000 in the assessee's accounts, which were treated as income from undisclosed sources due to lack of evidence. The ITO initiated penal proceedings under section 271(1)(c) against the assessee for concealment. The Income-tax Appellate Tribunal upheld the additions, stating that there was clear concealment of income to attract the penalty provisions. The Tribunal found that the assessee failed to provide evidence to support the genuineness of the loans and the winnings from horse races. It was concluded that the assessee introduced unaccounted money from undisclosed sources into the books, leading to clear concealment of income under section 271(1)(c). The Tribunal rejected the explanation regarding the winnings from horse races, stating that the story was fabricated to explain the receipts. The Tribunal emphasized that the onus was on the assessee to prove that the concealment was not due to fraud or neglect. The Tribunal's decision was based on the principle that even after the introduction of the Explanation to section 271(1)(c), the mental element of concealment must be proven by the assessee. The Tribunal highlighted that furnishing inaccurate particulars of income, as in this case with false explanations for income sources, constitutes concealment. The Tribunal referred to previous court decisions to support its interpretation of the law and held in favor of the Revenue on both issues raised in the reference. In conclusion, the High Court affirmed the Tribunal's findings, directing that appropriate relief be given to the assessee if relief is granted in a pending disclosure petition. The Court upheld the penalties imposed under section 271(1)(c) due to the clear concealment of income by the assessee. Each party was ordered to bear its own costs, and both judges concurred with the judgment. This detailed analysis of the judgment showcases the assessment of the concealment of income and the application of penalty provisions under the Income Tax Act, emphasizing the burden of proof on the assessee to demonstrate the absence of fraud or neglect in such cases.
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