9911796707
TMI Blog1976 (1) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... al late Mr. P.T. Antony. From 1st April, 1968 onwards it was converted into a firm by taking in his major sons and admitting the minor children to the benefit of partnership. The accounting year ended on 31st March, 1969 was the first assessment year for the firm and the year under appeal before us is the second year. After the accounting year is over, on 14th July, 1970 the managing partner Mr. P.T. Antony died. The original return of the firm was filed after his death and it was signed by Shri P.A. Jose. 3. The re-assessment proceedings were resorted to by the ITO for reasons which become apparent in the assessment proceedings for 1972-73. When the case for 1972-73 was taken up for hearing on 22nd Nov., 1972 the ITO noticed that the assessee was showing advance in gold weighing more than 9 kgs. Since no dealer can have more than 9 kgs. under the Gold Control Act and the Central Excise Rules he had requested the assessee to furnish the names and addresses of the parties who had entrusted the gold to the assessee to furnish the names and addresses of the parties who had entrusted and gold to the assessee. Immediately, the advocate of the assessee informed the ITO that this amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 1971-72 were taken up together and the assessee had applied to the CIT under s. 271(4A) and the CIT was pleased to waive the penalty for 1969-70 and 1971-72. According to the learned counsel the facts and circumstances of the year 1971-72 are exactly identical like the other two years and there is no reason why the penalty should be imposed for this year alone and for the other two years to be waived. 6. The Departmental Representative, on the other hand, submitted that enquiries were made which showed that gold has been passed off as bought from customers. Investigation had been made prior by the ITO and he relied on the order-sheet entries for the asst. yr. 1973-74 for this purpose. 7. We at once reject the assessee's contention that no penalty can be imposed because the person who concealed the particulars of income was the managing partner and the person who filed the return was some other partner. For this purpose his reliance on the decision of the Madras High Court in 31 ITR 704 is not correct. The same point had come up before the same High Court in the case of G. Krishna Swamy Naidu vs. CIT reported in 89 ITR 203 (Coch). There they had stated that the consciousness ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment. A reading of ITO's notings in the order sheet will make it clear that it was not the investigation by the ITO which brought up the matter by the assessee coming forward and stating the correct state of affairs. We give below the extract of the order sheet :— "22-11-1972. Sri E.A. Benny, Advocate produced the books of account and they were examined. The assessee has furnished me a stock tally of the head office at Broadway and of the breach at M.G. Road, In the head office, in the 22 Carat gold section, there is a closing balance of 185.850 grams of gold shown as received as advance from customers for ornament making while in the ornament section there is a closing balance of 6423.600 grams of manufactured ornaments to be delivered to customers who have entrusted gold with the assessee for manufacture of ornaments Similarly, in the branch at M.G. Road, there is a closing balance of 2142.950 grams of ornaments manufactured out of gold received from customers for manufacture pending delivery as on the closing dt. 31st March, 1972. As the total quantity shown as advance is substantial (more than 9 Kgs.) I requested the assessee's representative Sri Benny to furnish me the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was a difference of Rs. 31858 i.e., the assessee had over-stated this liability to the bank to this extent. For the asst. yr. 1960-61 it was a proprietors concern and for the asst. yr. 1961-62 and 1962-63 it was a partnership concern. As in the case before us the over-statement of the liability which was Rs. 31,858 rose up to Rs. 1,26,184 for the year 1963-64. The ITO asked for an explanation of the difference. The assessee wrote a letter to the ITO which is extracted in full in the High Court's order. In that letter he stated as follows :— "1. The firm H.A. Mohammed Haneef & Co. was constituted on 16th Aug., 1960. All the assets and liabilities of the proprietory business carried on by me till 15th Aug., 1960 was taken over by the said firm was a going concern. Sri A. Moideen Kunju one of the partners of the firm was appointed as the General Manager and the management of the affairs of the firm was completely vested in him. Even while I was carrying on the business in my proprietory capacity Shi A. Moideen Kunju was managing the whole affairs. He has retired from the firm on 31st Dec., 1963 and at present our relationship is a little strained one. As he was making all the borrow ..... X X X X Extracts X X X X X X X X Extracts X X X X
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