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TMI Blog1975 (12) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... y the learned ITO at Rs. 57,600. The learned AAC, in appeal, agreed with the finding of the ITO. The matter went up to the Tribunal. The Tribunal applied the gross profit rate of 17.5 per cent on the estimated sales of Rs. 2,88,000. Thus the addition was reduced. 3. The learned ITO at the time of competing the assessment was of the opinion that there was concealment of income by the assessee. He was also of the view that the assessee furnished inaccurate particulars of its income. Since penalty in the case could be imposed by the learned IAC, he referred the matter to him : 4. Before the learned IAC in penalty proceedings, the learned counsel for the assessee made following submissions : (1) That the income has been estimated by the ITO and that where income is estimated or where estimated by the estimate of income is resorted to, no penalty can be levied. (2) Sales figures are based on return filed voluntarily by the assessee before the Sales tax authorities and also on the basis of regular books of accounts produced by the assessee before the ITO and, therefore, no charge of concealment of sales can be made. (3) The ITO recorded satisfaction which is vague. There is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the learned IAC was wrong in holding that there was any concealment of income by the assessee. According to the learned counsel for the assessee there is nothing on the record to show that the assessee either concealed income or furnished inaccurate particulars of its income. It was also pointed out that in the present case the income was estimated and, as such, no penalty could be levied. It was also pointed out that there is nothing on record to show that any particular entries in the books of account are false or incorrect or any particular items of purchase or sale are omitted to be entered in the books of account. Thus the assessee must be held to have discharged the onus which rests upon it to show that the failure to return the total income assessed was not on account of any fraud or gross or wilful neglect on his part. He supports this contention in view of the ration of decision in the case of CIT vs. Sankarsons Co. (1972) 85 ITR 627 (Ker). It was also contended that the learned IAC was not right in holding that the assessee failed to produce account books for the period 1st April, 1969 to 12th May, 1970. The accounting period relevant to the assessment year under cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee in not returning the correct income. 7. We have heard the parties and perused the material available on record. From the assessment order and the penalty order, it is clear that both the authorities held that the assessee failed to produce accounts for the period 1st April, 1969 to 12th May, 1969. According to the assessee in assessment proceedings and also in penalty proceedings it was not correct to say that the books were not lost. The assessee explained in detail before the authorities below that the books for the said period were lost on 24th march, 1970 at Barmer Railway Station in the night and immediately after its report was lodged with the Police. This fact is also evidence from the assessment order. The police made inquiry and ultimately informed the assessee that after all efforts the account books could not be searched out. We may point out that the Police never gave report that the FIR was lodged without any basis. The ITO also recorded the statement of one of the partners of the firm on 2nd Aug., 1971. He stated that the books in question were seized by the Sales-tax authorities and later on they were lost. He also stated that after the seizure of the book ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eding on the basis of the findings given earlier at the stage of assessment and if those materials reasonably point to the conclusion that the disputed amount represented income and that the assessee had deliberately concealed particulars of the same, the levy of penalty can be justified." The Hon ble High Court further observed as under: "Let us take for instance a case where all the available materials had been produced at the stage of the assessment and the authorities, including the Tribunal, had considered the materials at that state. There cannot be any tenable reason as to why the authorities cannot analyse the same evidence and materials produced earlier in the course of the penalty proceedings and base their findings thereon." So. from this decision it comes out that evidence given by the assessee in assessment proceedings should be independently considered in penalty proceedings inspite of the fact that evidence was appreciated by the IT authorities or even by the Tribunal in deciding the assessment matter. It is settled law by now that penalty proceedings are independent proceedings from assessment proceedings. In the present case the assessee produced sufficient ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch lies upon the revenue in establishing that the assessee has concealed the particulars of his income or furnished inaccurate particulars of such income. It is burden akin to that in a civil case where the determination is made on preponderance of probabilities. It is also not necessary that any positive material should be produced by the assessee in order to discharge this burden which rests upon it. In order to discharge such burden the evidence may be direct or circumstantial or both. In some cases mere statement of the assessee may be enough. What quantum of evidence would rebut a legal presumption in a given set of facts does not admit of any rigid rule. No single fact but it is the cumulative impart of all the facts which affords the answer. The assessee gave plausible and reasonable explanation as discussed above, in detail that the books in question were lost as such they could not be produced. The profit was disclosed by the assessee on the basis of the books of account which were maintained in the ordinary course of the business. The authorities below while estimating profits did not point out any specific item from which it could be said that particular item was false o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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