9911796707
TMI Blog1995 (1) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... n presented under section 256(2) of the Income-tax Act, 1961, in respect of the assessment year 1975-76. Both these cases are being disposed of by this common order and Miscellaneous Civil Case No. 135 of 1987 shall be the leading case. In Miscellaneous Civil Case No. 135 of 1987, the petitioner/assessee, Shiv Narain Shivhare, prays that the Income-tax Appellate Tribunal did not mention the points raised and refused to refer the questions of law which were necessary to be decided in this case. The following two questions of law are framed by the petitioner in this case : "(i) Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in sustaining penalty of Rs. 58,870 under section 271(1)(c) ? (ii) Wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces of the case, the Tribunal having held that the Explanation to section 271(1)(c) as it stood prior to its amendment by the Taxation Laws (Amendment) Act, 1975, is applicable is justified in law in holding that penalty under section 271(1)(c) is leviable only with reference to the concealment actually detected ? (ii) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal having held that Explanation to section 271(1)(c) is applicable could exclude certain income from calculation of quantum of penalty, when Explanation to section 271(1)(c) as it stood prior to its amendment by the Taxation laws (Amendment) Act, 1975, did not provide for such exclusion? (iii) Whether, on the basis of law as it stood prior to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this prayer the petition was presented. The assessee had disputed these facts and the parties had filed necessary documents and addressed the court on the relevant points. The main question in these two cases was that, as to whether the aforesaid legal questions framed by both the parties were to be referred to the High Court for necessary findings or the Income-tax Appellate Tribunal was justified in rejecting their contentions and refusing to allow the questions to be referred to the High Court. We have heard learned counsel for the petitioner/assessee, Shri P. N. Gupta, and learned counsel appearing for the non-petitioner/Department, Shri R. D. Jain, and perused the record. The legal questions referred to above were considered by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be genuine. Cogent reasons have been given for the same. The alleged partnership was said to have been executed on March 29, 1975, which itself was to expire only after two days. Phool Chand was supposed to maintain books of account, but nothing was brought on record. There was nothing by way of any documentary evidence to show that any nature of work was done by Phool Chand on behalf of the assessee. Phool Chand was examined and he had admitted that there was no such evidence in this regard. He also admitted that there was no evidence worth the name which could be produced before the authorities. The assessee himself was found to be a young man of 42 years of age and was doing the business at the same place. The sub-partnership was, theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ponding loans. It was not found that any false expenditure was claimed by the assessee. It was held that even if a part of the interest claimed was to be disallowed by following a different formula, it would not follow that such disallowance would bring the case within the mischief of section 271(1)(c) of the Act. The learned Tribunal had considered this position and found that there was no question of any levy of penalty on the sum of Rs. 75,000 which was disclosed as income by the assessee voluntarily in his return. There was also no penalty prescribed under law for not disclosing the alleged source of income. The contentions of the Revenue that the penalty should have been imposed by the Appellate Tribunal was rightly rejected. The pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resh evidence on that point. The assessee had merely relied upon whatever was stated by him in the return. As such, it was found that there was no concealment of income and, therefore, no breach of section 271 was found. In view of this finding, no substantial legal question arose to be referred to the High Court. Reference was made to the case of CIT v. Dilip Kumar Bhusari [1992] 195 ITR 902 (MP) in which it was held that when there was addition of unexplained investment in the property and penalty deleted by the Tribunal, after recording findings of fact and there being no concealment of income by the assessee and no perversity in the order passed, therefore, in such a case no question of law arises. In this particular case only pure ..... X X X X Extracts X X X X X X X X Extracts X X X X
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