9911796707
TMI Blog1973 (3) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year in question showing a total turnover of Rs. 1,05,152 in respect of sales of French coffee, i.e., mixture of coffee and chicory and a gross profit in relation to coffee business of Rs. 1,892. The Income-tax Officer, after enquiry, held that the assessee had sold chicory as such and that he did not manufacture French coffee as alleged by him. In that view, he estimated the net profit in sales of chicory at Rs. 25,000 and in sales of coffee at Rs. 2,000 as against the profit of Rs. 1,892 returned by the assessee. The result, was that a sum of Rs. 25,108 was added as the net profit in the coffee-chicory business. In relation to the assessee's business in biscuits, the Income-tax Officer also estimated income at Rs. 27,000. He also initiated penalty proceedings under section 28(1)(c) and levied a penalty of Rs. 36,000. There was an appeal to the Appellate Assistant Commissioner, both against the original order of assessment as also against the order levying penalty. In that appeal it was contended by the assessee that some of his purchasers have been examined behind his back and that he should be given an opportunity to cross-examine those persons. In the light of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 90 per case. He, therefore, determined the assessment at Rs. 25,108 as in the original assessment. He also added a sum of Rs. 15,000 as the assessee's estimated profit in respect of his business in biscuits. This revised assessment was challenged by the assessee before the Appellate Assistant Commissioner. Before the Appellate Assistant Commissioner it was Contended by the assessee that there were no fresh facts or evidence apart from those available at the stage of the original assessment, that those facts are quite insufficient to reject the assessee's plea of manufacture and sale of French coffee, and that even the evidence of the purchasers did not establish that any extra money was paid over and above the sale price mentioned in the bills. The Appellate Assistant Commissioner, however, agreed with the Income-tax Officer and held that the assessee should have sold chicory as such and not French coffee. But he found that on a correct calculation, the addition in this regard should be Rs. 32,559 and not Rs. 25,108 as fixed by the Income-tax Officer. There was a further appeal to the Tribunal by the assessee. The Tribunal, on a consideration of all the facts and circumst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the finding of deliberate concealment of income cannot be arrived at on the basis of the said materials. The Tribunal considered the legal submission and held that section 271(1)(c) can be invoked even in respect of the concealment having taken place earlier to the coming into force of the Act. On the merits the Tribunal held that the materials are sufficient to disclose deliberate concealment of income on the part of the assessee. The Tribunal, however, reduced the penalty to a sum of Rs. 10,000 having regard to the fact that it had reduced considerably the additions made in respect of the chicory business. Before us the learned counsel for the assessee concedes that he cannot sustain the legal plea that section 271 cannot be invoked in this case, in view of the decision of the Supreme Court in Jain Brother's v. Union of India . But the learned counsel is very vehement in his submission that the materials available cannot form the basis for a finding that there has been a deliberate concealment of income in this case. It is pointed out by the learned counsel that the addition made in relation to coffee business was due to the fact that the assessee's explanation has not been ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Lordships of the Supreme Court, after referring to their earlier decision in Commissioner of Income-tax v. Anwar Ali , expressed : "From the above it is clear that penalty proceedings being penal in character, the department must establish that the receipt of the amount in dispute constitutes income of the assessee. Apart from the falsity of the explanation given by the assessee, the department must have before it before levying penalty cogent material or evidence from which it could be inferred that the assessee has consciously concealed the particulars of his income or had deliberately furnished inaccurate particulars in respect of the same and that the disputed amount is a revenue receipt. No doubt the original assessment proceedings for computing the tax may be a good item of evidence in the penalty proceedings but the penalty cannot be levied solely on the basis of the reasons given in the original order of assessment." We are not able to construe the said decisions as lying down that there should be fresh materials at the stage of the penalty proceedings to establish that there has been a deliberate concealment of income and that the materials gathered at the stage of asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the assessment stage. As a matter of fact it is found from the order of the Inspecting Assistant Commissioner that no attempt was made by the assessee to challenge the findings rendered at the stage of assessment and the applicability of section 271(1)(c) alone was contested. Even apart from this, we are of the view that the materials available in this case are sufficient to lead to the inference that there was deliberate concealment of income. As already stated, the evidence of the purchasers from the assessee who were examined by the Income-tax Officer shows that the assessee should have sold chicory as such without manufacturing French coffee. The assessee has not furnished any evidence at the stage of the penalty proceedings to prove that he in fact sold French coffee and not chicory as such. Therefore, the finding which is based on some positive materials which has not been challenged by the assessee in these proceedings, can form the basis for a finding that there is deliberate concealment. Even on the basis of the assessee's own bills, the profit earned in the sales of imported chicory alone apart from the quantity of chicory purchased locally, should be to the tune of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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