9911796707
TMI Blog1992 (6) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... , Zilla Parishad which is a new type of business undertaken this year. Against supply of Rs. 2,73,271, the payments received amounted to Rs. 3,12,000 resulting in profits of Rs. 38,820. The ITO added the said amount on the ground that the contract was only for supply and supply having been effected, the resultant profit was taxable for this year. The assessee has shown the difference of Rs. 38,820 as credit balance in the account of the Executive Engineer. The stand of the assessee was that this credit balance was squared up against further supplies made in the accounting year relevant for the assessment year 1983-84. In other words, the assessee treated the balance as part of running account and had also shown the resultant profit in the assessment year 1983-84, a fact which is not disputed. The income in the assessment year 1982-83 and 1983-84 was more or less the same. Therefore, though the assessee has taken a ground against the addition made in the assessment year 1982-83 by the ITO, the ground was not pressed at the time of hearing before the CIT(A). Therefore, the assessment of profit of Rs. 38,820 became final. As a consequence. the assessee has claimed deduction of the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITO clearly established that the assessee intended to treat the transactions on cash basis. The resultant credit balance which was assessed as profits on mercantile basis by the ITO was offered by the assessee by crediting sales in the assessment year 1983-84 where further supplies were made to the Executive Engineer and the credit balance of Rs. 38,820 was set off against further supplies made in the assessment year 1983-84. Before the ITO made the assessment for 1983-84 on 24-12-1985, the assessee in his letter dated 5-3-1985 sought deduction of the said amount from the profits of the assessment year 1983-84 on the ground of double addition. This plea was accepted by the ITO in para 2 of his assessment order dated 24-12-1985 for the assessment year 1983-84. From this factual position, it could be seen that the assessee has hastened not to press the ground taken against the addition of Rs. 38,820 for the assessment year 1982-83. When the CIT(A) started the hearing of the case on 11-3-1988, the assessee did not press the ground because he has already obtained relief by way of deduction of Rs. 38,820 from the profits returned for the assessment year 1983-84. It is pertinent to note ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal held that there was no concealment in respect of two items, but in respect of one item, though penalty is warranted, the amount was reduced. On a reference, the High Court held that there was deliberate concealment. Thus, the High Court held contrary view. On appeal, the Supreme Court reversed decision of the High Court. The Supreme Court held that from the fact that the assessee agreed to the additions to his income it did not follow that the amount agreed to be added was concealed income. The Supreme Court observed that there may be a hundred and one reasons for such admission but that does not absolve revenue from proving the mens rea of quasi-criminal offence. In the case of CIT v. Vinaychand Harilal [1979] 120 ITR 752 the Gujarat High Court considered a case of levy of penalty under section 271(1)(c) in respect of encashment of demand drafts and assessment under section 69A of the Income-tax Act, 1961 for want of satisfactory explanation. The penalty levied under section 271(1)(c) was cancelled by the Tribunal. On reference the High Court held that the revenue must establish that the receipt in question constituted income of the assessee. It also considered the sc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... res [1986] 162 ITR 517 considered a case of levy of penalty under section 271(1)(c) in the circumstances when the assessee agreed to addition of certain amount on account of unexplained investments to purchase peace in the department. In the absence of evidence adduced by the department to show that the assessee had consciously concealed particulars of income in respect of the unexplained investments the admission made by the assessee did not amount to concealmentt of income and penalty was not warranted. The High Court held that the department had to prove by independent evidence in addition to the evidence already brought on record during assessment proceedings that the amount represented concealed income of the assessee earned during the relevant accounting year. In the case of CIT v. Bhimji Bhanjee Co. [1984] 146 ITR 145 (Bom.) cash credits found in the books of account of the assessee were added to the income of the assessee for the failure of the assessee to establish genuineness thereof and the amount was assessed as income from undisclosed sources. Penalty levied under section 271(1)(c) was cancelled by the Tribunal. On a reference by the department, thejurisdictional Hig ..... X X X X Extracts X X X X X X X X Extracts X X X X
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