9911796707
TMI Blog1974 (3) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... p specially for income-tax purposes. (b) Not only the cost of raw materials consumed has been inflated, there is also manipulation of the quantities consumed and purchases of condiment power have been disguised as purchases of chillies, etc. (c) Wages have been inflated, and to support this inflation, wage-sheets have been cooked up. The Income-tax Officer further found that in spite of notice to produce the stock and production register, the same was withheld. On these findings the account books were rejected. The proviso to section 13 of the Indian Income-tax Act, 1922, was applied, and a best judgment assessment was made estimating the income at Rs. 1,10,618. The estimate was arrived at by applying a rate of 25 per cent. net on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate of 20 per cent. was sufficient. To this extent the appeal was allowed. The Income-tax Officer drew up penalty proceedings under section 28(1)(c) on the ground that the assessee had deliberately concealed its income and had furnished inaccurate particulars thereof. After hearing the assessee the Income-tax Officer held that the assessee had concealed the particulars of its income as well and had furnished inaccurate particulars regarding items which he disclosed, because, (1) the assessee did not produce the stock book and production register, and thus concealed the true particulars of its income from the department (The Income-tax Officer's conclusion that the assessee did maintain these two registers but did not produce them befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment proceedings, though rebuttable, could constitute sufficient, material for penalty proceedings. In the quantum appeal the Tribunal did not consider it necessary to examine the findings of the departmental authorities charging the assessee with concealment, and so the Tribunal observed that the findings of the departmental authorities could not be deemed to have been disapproved by the Tribunal, and that in this view those findings were available for being relied upon in the penalty proceedings. It was then observed that in the present case the Income-tax Officer had referred to those very findings of concealment in the penalty proceedings, and the assessee had not produced any material to show that those findings were in any way wro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recorded by the Income-tax Officer and affirmed by the Appellate Assistant Commissioner were approved or disapproved by the Tribunal in the quantum proceedings. In the present case the Tribunal has held that those findings were not disapproved, and so they were available and could be relied upon by the departmental authorities in the penalty proceedings. This findings is, in our opinion, within the purview of question No. 3. It may be recalled that apart from many other defects of inflation and suppression detected in the books of account maintained by the assessee, the Income-tax Officer and the Appellate Assistant Commissioner had found that the circumstances showed that the assessee did maintain the stock and production register but ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at they were not maintained. Thus, it cannot be held that the Tribunal approved the finding that those registers were deliberately suppressed. It cannot hence be said that that finding survived after the Tribunal's order. With regard to the various findings showing that the account books were cooked up and various costs, etc., were inflated, the Tribunal held : "It is, however, surprising that even though the assessment has been made under section 23(4) of the Act, the Income-tax Officer went into the account books produced very minutely. We cannot alter the assessment under section 23(4) to one under section 23(3) in this appeal." In the context of its earlier finding with regard to the maintenance of the stock and production regist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alty proceedings. The question referred to us also proceeded on the basis that the earlier findings had been relied upon. Since there were no findings relevant to the question of Concealment or furnishing of inaccurate particulars, there was no question of their being relied upon. On the basis that such findings were available, the Tribunal set aside the order of the Appellate Assistant Commissioner. In our opinion it was not justified in doing so. We would, therefore, answer question No. 3 in the negative, in favour of the assessee and against the department. In view of this answer questions Nos. 1 and 2 are merely academic. We, therefore, leave them unanswered. The assessee would be entitled to costs, which are assessed at Rs. 200. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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