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TMI Blog1990 (11) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... c) for the assessment year 1964-65? (2) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding and had valid materials to hold that the assessee has not concealed his income for the assessment year 1964-65 ?" The assessee had not been assessed to income-tax till the assessment year 1963-64. With effect from January 1, 1964, the assessee became partner of the firm, Messrs. Inden Bisellers, contributing a capital of Rs. 30,000. On January 5, 1965, the assessee filed a return disclosing an income of Rs. 56,306, made up of Rs. 58,719 being the share income from the said firm, less Rs. 2,413 being the interest on borrowals for the assessment year 1964-65. Though, initially, the return f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t if the borrowings were genuine, there was no reason for the assessee to come forward and admit the same as his own income and that between the time when the share income was admitted and the assessment came to be reopened, the bankers had confessed before the Department that they had only lent their names and did not in fact pay any cash and that, as soon as the notice under section 148 of the Act came to be served, the assessee had come forward to admit the concealed income and, under these circumstances, the stand of the assessee that the loans were genuine was only an afterthought and, under the Explanation to section 271(1) of the Act, the assessee had failed to prove that the failure to return the income was not on account of fraud o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... three legal presumptions, viz., (1) that the amount of the assessed income is the correct income and it is in fact the income of the assessee himself ; (2) that the failure of the assessee to return the correct assessed income was due to fraud ; and (3) that the failure of the assessee to return the correct assessed income was due to gross or wilful neglect on his part. Again, in Chuharmal v. CIT [1988] 172 ITR 250 (SC), the Supreme Court pointed out that, in a case where the assessee had returned an income which was less than eighty per cent. of the assessed income and the Explanation applied, the Revenue had discharged the onus of proving concealment of income. In CIT v. K. R. Sadayappan [1990] 185 ITR 49 (SC), the Supreme Court ruled tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facie indicate that the version of the assessee cannot be true, the Tribunal had not adverted to any material placed by the assessee to dislodge the presumption. The absence of reference to such materials is obvious because the assessee did not place any materials at all. When the assessee had not placed any materials to dislodge the presumption, it is difficult to understand the view of the Tribunal that the assessee had discharged the onus under the Explanation. On the basis of this misdirection, the Tribunal further proceeded to hold that the Department had to establish the concealment of the assessee and that not having been done, there was justification for the cancellation of the penalty. The reasoning of the Tribunal holding that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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