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TMI Blog1991 (9) TMI 117X X X X Extracts X X X X X X X X Extracts X X X X ..... 000 being seven instances which are extracted in the order of the first appellate authority. Further a sum of Rs. 58,444 was credited in the cash book on 21-9-1976 without any sale or rationed articles and that was also treated as concealed income. The additions made by the Income-tax Officer were accepted by the assessee and no appeal was filed against the said order. Thus the assessment had become final. During the course of assessment proceedings, the Income-tax Officer had initiated action under section 271(1)(c) of the I.T. Act, 1961 and accordingly levied a penalty of Rs. 3,88,860. The assessee carried the matter in appeal before the CIT (Appeals). The contentions of the assessee before the first appellate authority were that the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further appeal. 3. We have heard rival submissions and perused the records. The fact that the assessee has agreed for the additions is not disputed. The circumstances in which the assessee had agreed for the additions are well set out in the assessee's two letters dated 15-121979 and it would be worthwhile to reproduce the same : " Sir, Ref : 46-003-PY-3323/ALY-A/77-78-Your letter dated 23-11-79. 1. With reference to your letter, I beg to submit as under. 2. It is stated in your letter that on a perusal of my books of account, it is seen that I have introduced in my Cash Book for the account year ended 31-3-1977, cash credits in a clandestine manner as mentioned in your notice and on this basis it is stated that money to the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 34 Rs. 9,839.75 I submit that the sum of Rs. 58,443-93 credited in the Cash Book on 21-9-1976 is not my own money but the sale proceeds received in advance in respect of sale effect on 22-9-1976 and 23-9-1976 as explained above. 7. In view of the submissions made by me, I request you to kindly finalised my assessment for 1977-78 by including therein the sum of Rs. 5,50,000 referred to earlier and also by not including the sum of Rs. 58,443-93 as proposed in your notice. 8. I also pray that in view of the co-operation shown by me in the matter of finalisation of my assessment for 1977-78, you may be pleased to kindly refrain from initiating any penal proceedings against me either under section 271 or under section 273 and I also pray ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts who had business dealings with the assessee and that there were also some amounts left with him in the past for introduction. As for the sum of Rs. 58,444 it was explained that this was advance money received towards the sale proceeds. Thus there was some explanation with regard to both these sums. However, it would appear that the assessee was anxious to purchase peace with the revenue by agreeing for the additions. This anxiety on the part of the assessee is writ large on the face of the two letters. It is also not in dispute that the assessee had extended co-operation in the matter of finalisation of the assessment. Para 8 of his letter dated 15-12-1979 and also para 3 of his letter of even date would clearly show that the assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e explanation in the penalty proceedings. Thus, the falsity of the explanation has not been established. The statement of peak credits furnished by the assessee is in accord with the explanation and suggest the existence of a rolling fund over the years, sometimes increasing and sometimes decreasing and if regard is had to this feature of the explanation, it can be held that the peak credit statements supported the stand of the assessee to a larger extent. Pushed further, the quantum of concealment, if any, worked out on the basis of the peak credit statements can be only of the order of Rs. 14,000 and there would be no justification for the levy of penalty on the sum of Rs. 6,08,444 as has been done. 5. Sri C. Abraham, the learned senio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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