1992 (4) TMI 93

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..... m which date it was adjourned to 21st Dec., 1983. On 21st Dec., 1983 the assessee produced books of account and also explanation regarding the discrepancy regarding distribution of profits along with affidavit of Shri Parasmal, Accountant. On the same day the ITO noticed a claim of loss of Rs. 6,994.23 in the cotton account. It was explained by assessee's counsel that loss of cotton weighing 1,242 kgs. were wrongly shown in purchase account of cotton when the same was included in the kapas account. The ITO asked to reconcile the figures further but the "assessee could not properly reconcile the position" but at the same time pleaded that there had arisen surplus of 69.43 kgs. (which during hearing was stated to be in quintals) in kapas acco .....

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..... en much more inconvenient for him to have sought time to submit explanation and to reconcile the discrepancy. He has filed quantitative details of kapas account and cotton account before us in which he claims that the discrepancies have been reconciled. The learned counsel has referred to the decisions reported in the case of CIT vs. Sohanlal Brijlal (1979) 13 CTR (Raj) 347 : (1979) 120 ITR 901 (Raj) and so also the case of Parminder Kumar Gupta vs. ITO (1988) Taxation 89(4)-55 (Del). He submitted that on the basis of these decisions merely on the basis of agreement with the Department or on the basis of surrender, the penalty could not be imposed. The learned Departmental Representative on the other hand had relied on the decision of the H .....

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..... had 5 partners and it should have been much more difficult for the assessee to go back to his village and again come on the next date of hearing to Beawar, it appears that the assessee found it more convenient to agree to this addition which should have had negligible tax effect. We find that there is nothing in the order sheet to show that the surrender was made by the assessee in spite of being told that the penalty under s. 271(1)(c) would be imposed or that he had agreed to the addition because he was not told that any penalty shall also be imposed and hence agreeing to this addition was the end of the matter. Looking to the facts and circumstances of the case, we are inclined to believe that the surrender should have been with the ide .....

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