1976 (4) TMI 65 - AT - Income Tax

Summary

Issues:
1. Quantum assessment under section 143(3) of the IT Act, 1961.
2. Levy of penalty for concealment of income and furnishing inaccurate particulars under section 271(1)(c) of the IT Act, 1961.

Quantum Assessment (Section 143(3)):
The appeals pertained to the asst. yr. 1970-71 by the firm Madan Lal Pawan Kumar. The primary issue was regarding the disallowance of a shortage claimed in the pista dodi account by the assessee during the assessment. The ITO found the shortage unverifiable and made an addition to the income. The AAC upheld the addition. However, during the second appeal, the assessee presented a certificate from the Indo Afghan Chamber of Commerce to support its claim of a lower shortage amount. The Tribunal, inclined to admit the certificate as evidence, remanded the case to the AAC for fresh adjudication considering the new evidence.

Cash Credits:
The Tribunal examined three cash credits totaling Rs. 9,000. The first credit of Rs. 2,000 in the name of Charan Das was accepted as genuine, considering his unrelated status to the assessee and his confirmation of the credit. The second credit of Rs. 3,000 in the name of Smt. Vidyawati was also accepted as she demonstrated the source of funds from a property sale. Additionally, two deposits of Rs. 2,000 each in the names of minor sons of a partner were deemed genuine based on an affidavit from the minors' grandfather confirming the source of the funds. Consequently, the Tribunal deleted the additions related to these cash credits.

Penalty (Section 271(1)(c)):
Regarding the penalty under section 271(1)(c), the Tribunal considered the assessee's submission of the certificate from the Indo Afghan Chamber of Commerce and the details provided to demonstrate the marginal shortage. The Tribunal opined that the estimated addition for a marginal shortage did not warrant a penalty. It noted that there was no conscious concealment of income or evidence of fraud or wilful neglect. Despite remanding the quantum appeal for further consideration, the Tribunal decided to delete the penalty in light of the circumstances, concluding that the charge of concealment could not be established against the assessee.

In conclusion, the Tribunal allowed the quantum appeal and deleted the penalty, emphasizing the lack of evidence supporting the imposition of a penalty for concealment of income or furnishing inaccurate particulars.