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TMI Blog1989 (10) TMI 41X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year is 1970-71. Initially, the respondent, hereinafter referred to as the assessee, returned a loss of Rs. 4,860 for the assessment year 1970-71. Subsequently, a revised return was filed accounting for income in a sum of Rs. 34,790. While finalising the assessment, the Income-tax Officer noticed that there were no drawings for domestic expenses. It was also found that the assessee had contributed to a chit fund a sum amounting to Rs. 46,000 up to October 16, 1969, and as the assessee was not able to account for the resources out of which the contributions to chit funds were made, the said sum was treated as undisclosed income of the assessee. Likewise towards domestic expenses, a sum of Rs. 5,000 was fixed and that sum was also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h sums were utilised for the domestic expenses. In any event, it was argued before the Tribunal that the estimated sum of Rs. 5,000 itself will not be sufficient for invoking section 271(1)(c) of the Act. As regards contributions to chit funds, the argument on behalf of the assessee was that the assessee did not make any contribution and the payments were made by one Parasuraman. Therefore, there was no question of concealment of income so as to attract section 2.71 (1)(c) of the Act. It was further argued on behalf of the assessee that the levy of penalty on the basis of estimate without a further finding of mens rea on the part of the assessee cannot be sustained. On behalf of the Department, it was argued before the Tribunal that the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... funds requires reconsideration. No doubt, in CIT v. Sarada (P.) [1985] 154 ITR 387, 393 (Mad), Ramanujam J., speaking for the Bench, has held as follows : "It is no doubt true that a finding of fact arrived at by the Tribunal cannot normally be interfered with by this court. But if the Tribunal failed to take into account the relevant material, or has acted on inadmissible material, or has based its conclusion on conjectures and surmises, this court can ignore such finding of the Tribunal and re-examine the issue arising for decision on the basis of materials on record." Contending contra, Mr. Janarthana Raja, learned counsel appearing for the assessee, placing reliance on a judgment of the Supreme Court reported in Sir Shadilal Sugar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner wrote to the Sangam Chit Fund at Bangalore and after getting the particulars he inferred that the assessee had failed to account for the income of Rs. 18,000. The assessee was not given an opportunity to cross-examine the representatives of the Sangam Chit Fund at Bangalore. Though the chit may be in the name of the assessee, there is no proof that it is the assessee who made the payments, Even the Inspecting Assistant Commissioner does not state that the Sangam Chit Fund authorities had pointed out that the amount due in respect of the chit were paid by the assessee himself. That seems to be only the inference of the Inspecting Assistant Commissioner. Even though the explanation of the assessee may not be accepted in the quantum app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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