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TMI Blog1942 (1) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. There was an appeal to the Assistant Commissioner and that officer, although he reduced the amount of the tax, was also of the opinion that there had been deliberate concealment and therefore a penalty was imposed by him though in a lesser sum. The assessee then applied to the Commissioner under Section 33 Of the Act and there was an application for a reference to this Court Under Section 66(2) of the Act. The learned Commissioner gave some Relief under Section 33, but he did not refer the case to this Court. The Tax and the penalty were reduced, but the learned Commissioner was also of the opinion that there had been concealment of the income. The assessee then applied to this Court under Section 66(3) of the Act on the 30th of July 1936 and by an order of this Court dated the 28th of July 1939 the Commissioner was required by us to state a case and to formulate certain questions of law for our decision. These questions of law were mentioned in the application to us and this Court was of the opinion that question No. 1 was not fair and was not couched in happy language, but the other three questions did arise and the learned Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . This purchase was subject to the usufructuary mortgage of ₹ 65,000. On the 14th of January 1933 in execution of the same decree the assessee put the house at Lohar Gali to sale and purchased it for ₹ 1,700. The value of the Shankerganj property was fixed at the figure of ₹ 72,637. This meant that the property was actually purchased for ₹ 73,837 out of which ₹ 1,200 was adjusted towards the decretal amount. The assessee had for the assessment year 1934-35 returned an income of ₹ 35,414. No income in this return related to the transactions which we have already mentioned. Nothing was said in the return about the purchase of village Sahil or the purchase of Shankerganj property or the purchase of the house in Lohar Gali. The Incometax Officer was of the opinion that when village Sahil was purchased for ₹ 56,000 the capital of ₹ 40,000 was wiped out and there was a clear profit of ₹ 16,000. He also thought that there was a profit of ₹ 1,700 when the house in Lohar Gali was purchased. In connection With the purchase of the Shankerganj property he was of the opinion That there was a profit of ₹ 1,200 and f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oks nor was the interest credited to the accounts and includeed in the return and it was clear that the items realised during the accounting year November 1932 to November 1933 were not so small as to have escaped the attention of the assessee. He agreed with the Income-tax Officer in the view that the assessee had deliberately omitted certain items and the penal assessment was rightly made. As we have mentioned before, the Assistant Income-tax Commissioner held that the income of ₹ 16,000 realised in December 1929 should not be considered in the present assessment and he, therefore, reduced the penalty also from ₹ 2,500 to ₹ 2,000. When the matter went before the Commissioner in connection with the application under Section 33 he gave effect to the contention of the assessee that a certain sum of ₹ 2,000 collected before the suit was filed in the year 1924 should not be taken into consideration and the assessable income was therefore reduced further and relief to that extent was given to the assessee. The penalty was also reduced from ₹ 2,000 to ₹ 1,200 but on the question of concealment he thought that the question was a question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lief only to the extent of ₹ 16,000 treating ₹ 40,000 as having been received towards the principal and ₹ 16,000 as having been received towards interest and as this profit was received in 1929 the Income-tax Officer's estimate of income was reduced by ₹ 16,000 only, although as a matter of fact it ought to have been reduced by ₹ 36,000. Reliance was placed upon the case of the Commissioner of Income-tax, Bihar and Orissa v. Kameshwar Singh of Darbhanga [1933] A.L.J.R. 527; 1 I.T.R. 94. It may be observed that this point was nowhere taken by the assessee till it was taken for the first time before us in the course of argument. Apart from that, whatever may be the right of the assessee so far as appropriation is concerned, when a sum of money is paid in cash by the debtor to the creditor, but when property is purchased in satisfaction of the debt, the law has been clearly laid down in the case of Raghunandan Prasad v. The Commissioner of Income-tax [1933] 1 I.T.R. 113. The assesSee received a transfer of the property at the value of the purchase price In satisfaction pro tanto of the liability of the mortgagors for principal And interest and to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orities were entitled to impose penalty when the returns for the years in which concealment is alleged to have been made, were not filed by the present assessees, but by their ancestors who were dead before the year under assessment, especially when the said act was of quasi-criminal nature? The learned Commissioner says that the records show that the Return for the assessment year 1934-35 was filed over the signature of Bhoori Singh on behalf of the Hindu undivided family and Bhoori Singh is still alive. Learned counsel for the assessee had to admit that this question was misconceived and we, therefore, content ourselves by saying that the question does not really arise in view of the admission made by learned counsel. The third question referred to us is as follows:- Whether the method of computing profit adopted by the incometax authorities is correct, and whether the figure arrived at was assessable during the year in question? We have already in the course of our judgment referred to the various contentions advanced by learned counsel for the assessee and we have made it clear that relief to the fullest extent w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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