9911796707
TMI Blog2003 (4) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... vealed that upon a search under section 133 of the Income-tax Act, 1961, a duplicate account book was found where the opening balance shown exceeded the figure of the closing balance of the previous year disclosed in the return. This amount was added in the income of the assessee for the previous year. By reason of Explanation 1 to section 271(1)(c), such addition would amount to concealment by fiction. Therefore, the mischief of section 271(1)(c) of the Income-tax Act, 1961, is attracted in this case. That was how this matter was dealt with by the income-tax authorities up to the Tribunal, against which this reference has been sought for. Mr. J.P. Khaitan, learned counsel for the assessee, has pressed three contentions for our considerati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when it cannot be conclusively determined whether this amount is an income of the assessee or at the hands of the partners included in their capital account. Therefore, when two views are possible, no penalty could be imposed. Thirdly, this amount admittedly has been added as income of the assessee for the previous year. At the same time, this was shown in the return filed by the partners as their income and such returns have since been accepted. The Department itself had treated the same amount once as income of the assessee and again as income at the hands of the partners. Unless the amount is owned by the assessee in view of section 69A, there cannot be any question of concealment. When the Department itself had accepted the same in both ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion advanced by the assessee could not be proved. As such the same can be treated to be false. By no stretch of imagination the explanation can be treated to be a bona fide one. As such it attracts the mischief of Explanation 1. The question is relevant for the purpose of the relevant previous year. The court is not supposed to look into the question as to whether this income could be treated to be an income of the following previous year. The acceptance of revised returns submitted by the partners claiming the same to be that of their own income is wholly immaterial. Even if some-one claims the income added to the assessee as their own income by reason of section 69A, the authority is empowered to add the same as income of the assessee. As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant previous year. But there is nothing to prevent the assessee to treat the income as income of the following previous year. It might have been a concealment for the relevant previous year. But whether it is a concealment for the following previous year cannot be determined without a reference to the assessment for the following previous year. Therefore, it appears to us that two views are possible. At the same time, this income was shown in the capital accounts of the partners. Whether this was the income of the partners or of the assessee is also a question, which can be raised requiring determination. The determination in the quantum proceedings not being final, this question has to be examined. It does not appear that the learned Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ell as at the hands of the partners, the Department cannot conclusively say or stick to one for the purpose of imposing penalty that there was concealment by the assessee. Inasmuch as in order to attract the mischief of concealment in a given case, it has to be treated under which provision the particular case is being governed. Section 69A deals with unexplained money of which the assessee is found to be the owner. The material difference between sections 68 and 69A is that section 68 does not require that the amount is to be owned by the assessee. It only deals with any amount shown in the books of account of the assessee. Whereas section 69A deals with money, etc., owned by the assessee and found in his possession. Therefore, ownership ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owned by the assessee and there is a conclusive finding to that effect it is not hit by Explanation 1 to section 271(1)(c). Whereas in National Textiles v. CIT [2001] 249 ITR 125 (Guj), it was held that until and unless the Explanation is found to be false or mala fide, the mischief of section 271(1)(c) cannot be attracted. In the present case, there was nothing to indicate that the explanation was false or mala fide. The learned Tribunal has not arrived at any such conclusion. Having regard to the facts and circumstances of the case, as was held in National Textiles [2001] 249 ITR 125 (Guj), no reasonable and positive inference could be drawn. Because of the two stands taken by the income-tax authority in this case by adding the amount i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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