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TMI Blog1973 (8) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... t Commissioner. The imposition of penalty was upheld by the Tribunal, but the quantum of penalty was reduced to Rs. 5,500. The Tribunal refused to state the case on the ground that no question of law arises when the assessee applied under section 66(1) of the Act. The assessee thereupon filed O.P. No. 2300 of 1968 under section 66(2) of the Act. In compliance with the directions contained in the judgment of this court in that original petition the Tribunal has referred the following question: "Whether, on the facts and circumstances of the case, the Appellate Tribunal was correct in holding that the provisions of section 28(1)(c) of the Indian Income-tax Act, 1922, applied to the applicant ? " The assessment for the assessment year 1959-60 was completed by the Income-tax Officer as per his order dated <?xml:namespace prefix = st2 /> August 15, 1960 . The total income brought to tax in respect of that year was Rs. 60,537. The breakup of this amount was: Rs. 12 5 under " property ", Rs. 29,912 under " business " and Rs. 30,500 under " other sources ". The amount covered by the last head represented unexplained credits in a suspense account maintained by the assessee. In app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... val of the Inspecting Assistant Commissioner, Ernakulam, I impose a penalty of Rs. 10,000 under section 28(1)(c) of the Indian Income-tax Act, 1922 ". No doubt, the Appellate Assistant Commissioner considered the credits in seriatum. But he also, relying on the order of the Appellate Tribunal in the appeal against the assessment order, dismissed the statements given by the creditors as unworthy of credence. The Tribunal on further appeal. An the penalty proceedings rested their decision solely on the findings that were entered in the earlier appeal against the assessment order. This is what the Tribunal says in annexure " D " to the order : "We have carefully gone through the order of the Appellate Assistant Commissioner regarding the cash credits and we have also heard the assessee's representative on these points. It is clear that most of the persons from whom the amounts were alleged to have been borrowed were close relations or employees of the assessee. There are clear circumstances in each of these cases to indicate that the assessee's version regarding the cash credit was palpably untrue. It does not appear to us necessary to discuss each of these cash credits in detail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd except the explanation given by the assessee, which explanation has been found to be false, it does not follow that the receipt constitutes his taxable income. " The third point settled by that decision, as stated by Grover J., who delivered the judgment of the court, is as follows: "It cannot be said that the finding given in the assessment proceedings for determining or computing the tax is conclusive. However, it is good evidence. Before penalty can be imposed the entirety of circumstances must reasonably point to the conclusion that the disputed amount represented income and that the assessee had consciously concealed the particulars of his income or had deliberately furnished inaccurate particulars." In Anwar Ali's case , there was no other material, apart from the falsity of the explanation given by the assessee, to come to the conclusion that the receipts were of a revenue nature and that the assessee had consciously concealed the particulars of his income or had deliberately furnished inaccurate particulars. Therefore, the appeal by the revenue was dismissed. The next decision to which Mr. Paripoornan, the learned counsel for the assessee, invited our attention i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oor Mills, was not a genuine partnership but was the sole proprietary concern of the assessee, and that the whole of the income from that concern belonged to him. The Income-tax Officer also found that the assessee had not included any income from that concern in the return filed for the first year, and that for the next three years the assessee disclosed only 20% as his share of the profits from it. In the penalty proceedings the Tribunal referred to its earlier findings in the appeal relating to the refusal of the income-tax authorities to register Kohinoor Mills as a firm. In that appeal the Tribunal had found that there was not only no such firm in existence but that the Kohinoor Mills belonged to the assessee. The Tribunal had also noticed that of the four partners, three were minor grandchildren of the assessee, and that the final disposition of the accumulated profits was made only after the assessee became the sole proprietor of the business. It was also held by the Tribunal in the appeal relating to registration that the whole scheme was to disguise the profits of the assessee as those of the firm. It is in these circumstances that the court held that it cannot be said tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of pure questions of fact, the inference from proved facts being itself a question of fact can be attacked as being erroneous in law only if there is no evidence to support it or if it is perverse. " In our view, this is a case of "no evidence" at all to support the conclusion that the assessee is guilty of concealment of particulars of his income or deliberately furnishing inaccurate particulars of such income. The Tribunal has only found that the explanation of the assessee is not acceptable. But this alone will not afford evidence on which the Tribunal could properly arrive at the conclusion about the guilt of the assessee. For this the revenue will have to establish on cogent material that the amounts in dispute are revenue receipts of the assessee or, in other words, taxable income of the assessee. The question we are considering is whether there was any material before the Tribunal to arrive at the conclusion it had made about the guilt of the assessee. In our view, there is no material at all for concluding that the receipts in question are taxable income of the assessee. In fact, there is no finding by the Tribunal to that effect. Therefore, the conclusion of the Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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