9911796707
TMI Blog1971 (8) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... and in the circumstances of the case, the Appellate Tribunal was right in holding that the assessee is not guilty of any fraud or gross or wilful negligence in furnishing the return and in cancelling the penalty under section 271(1)(c) of the Income-tax Act, 1961 ?" The assessee is a firm doing business in the manufacture and sale of horn, ivory and rose-wood curios. For the assessment; year 1964-65--the relevant previous year being the year ended March 31, 1964-the assessee returned an income of Rs. 44,614 under the head "business". The Income-tax Officer held that the gross profit of Rs. 1,50 411 on the admitted turnover of Rs. 5,60,565 was too low as it worked out only at 24.3%. He found several defects in the accounts and rejected the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suppression or concealment of income. The Tribunal found that the finding regarding the defective nature of the account and suppression of stock was based on mere suspicions and conjectures, and that the reasons given by the Income-tax Officer for his conclusion that the assessee had suppressed stock to a large extent was not supported by any evidence. The Tribunal, therefore, found that the assessee was not guilty of any fraud or gross or wilful negligence. It, therefore, cancelled the order imposing the penalty. The Explanation added to section 271(1)(c) is as follows : " Where the total income returned by any person is less than eighty per cent. of the total income (hereinafter in this Explanation referred to as the correct income) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has dis charged the burden thrown upon it. The Appellate Tribunal has referred to the explanation given by the assessee and said that the conclusion in the assessment order regarding the defective nature of the account and suppression of stock is based on mere suspicion and conjecture. It also found that the Income-tax Officer's statement that the figures of opening and closing accounts shown in the trading account are highly suspicious and that in a business of this type the stock available with the assessee should have been much more in view of the turnover shown in the books, are mere surmises. The Tribunal was also of opinion that the finding of the Income-tax Officer that in a business of this type it can never happen that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
