9911796707
TMI Blog1993 (8) TMI 148X X X X Extracts X X X X X X X X Extracts X X X X ..... also completed in the normal course. Thereafter notice under section 148 was issued for all the years by the Assessing Officer. The facts leading to the issuance of notice under section 148 can briefly be summarised. There was a search conducted at the business premises of the assessee and in the course of the search, it appears, books relating to the assessment year 1987-88 were seized. The Assessing Officer had also made reference to A.P.M.C. The A.P.M.C. is an Institution under whose auspices sale of orange/mosambi was carried on by the commission agents. The A.P.M.C. charged a commission of 55 per cent on the turnover in this trade. The Assessing Officer collected the cess payment made by the assessee to A.P.M.C. during these four year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at penalty should not be initiated. Based on this agreement, revised returns were also filed by the assessee and the assessments were completed on the basis of the revised returns. Penalty proceedings were also initiated by the issue of show-cause notices which lead to the imposition of impugned penalties. 3. The assessee contested the matter before the CIT (Appeals). In the course of appeal proceedings, several procedural lapses were pointed out to the CIT (Appeals) including the one relating to the format under which the show-cause notices were issued. The CIT (Appeals) took the view that the penalties were not exigible as it had to be assumed that there was a tacit understanding between the assessee and the Department that there would b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Department. No books of account were seized as alleged in the penalty orders. The reference to payment of cess to A.P.M.C. can have no bearing on the penalty proceedings. The facts gathered from the A.P.M.C. regarding cess payment were not correct. No commission was ever received by the assessee from the A.P.M.C. The commission is something which accrues to the assessee as a result of understanding between the assessee and the fruit vendors. A.P.M.C. only has indicated the maximum amount one could be charged. It is open to the assessee to charge a lesser amount and in many cases a commission at a lesser rate was charged by the assessee to its customer. That there is a practice to pay return commission is well-known in this trade and e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atter of fact has highlighted this aspect of the matter in his impugned order. He has also stated in para 5 of his order for the assessment year 1983-84 that the claim of the Assessing Officer that the assessee had taken inspection of the seized books of account and documents was absolutely not correct as no books of account were, seized and that was accepted by the Assessing Officer also. Thus it would appear that the Department was not in possession of any incriminating material which would go to show that there was suppression of income by the assessee. The revenue proceeded on the basis of the cess payment made by the assessee which, as observed earlier, was at the rate of 55 per cent of the turnover. It was by working backwards the tur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be overlooked. That was also a case where there was an agreed addition but this addition resulted in the imposition of penalty. The Supreme Court observed that from the assessee agreeing to addition to its income it did not follow that the amount agreed to be added was concealed income as there could be 101 reasons for such admission. We are conscious of the fact that this decision was rendered in the context of mens rea of quasi-criminal offence. But that to our mind would not in anyway alter the situation. We may again refer to the decision of the Madhya Pradesh High Court in CIT v. Punjab Tyres [1986] 162 ITR 517. In that case the Madhya Pradesh High Court has held that even in case of agreed addition to the total income on account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certain amounts and that according to the assessee was with a view to buying peace. This decision of the Delhi High Court would, therefore, be of no use in deciding the issues before us. Similarly in the case of Western Automobiles (India) there was an addition of hundi loans on an agreed basis. The assessee in that case claimed that there was a tacit understanding that the penalty was not to be imposed. The Court confirmed the imposition of penalty as the assessee failed to offer any proof that the addition made on agreed basis did not represent the assessee's income. Such is not the case here. In this case as observed earlier the Department did not have in its possession any evidence that showed that there was a concealment of income. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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