9911796707
TMI Blog1984 (2) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... Niamat Singh, Rohtak, is a registered firm of commission agents doing business in sale and purchase of foodgrains and sugar. During the " previous year " relating to the assessment year 1968-69, the assessee through the aegis of Messrs Ram Lal Chandan Lal, Muzaffarnagar (Uttar Pradesh), agreed to purchase 75 bags of sugar from Messers S. S. Sugar and General Mills Limited, Muzaffarnagar. The assessee had to pay Rs. 28,575 to the said Mills and Rs. 11,050 to Messrs Ram Lal Chandan Lal, Muzaffarnagar. The delivery of sugar had to be taken on December 5, 1967. In pursuance of this contract, Rs. 28,575 was deposited in the Punjab National Bank, Muzaffarnagar Branch, on December 4, 1967, for purchasing a draft in favour of Messrs S. S. Sugar and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not relevant for our purposes. On appeal, the Income-tax Appellate Tribunal confirmed the addition of Rs. 31,000 to the returned income of the assessee. Penalty proceedings were initiated against the assessee. The assessee reiterated its claim regarding the receipt of two amounts of Rs. 15,000 and Rs. 16,900 from Messrs. Dhanna Mal Ram Sarup, Rohtak I and Messrs. Giga Ram Kapur Chand, Rohtak, respectively. The IAC did not accept the plea of the assessee and levied penalty of Rs. 35,000. Aggrieved by this order, the assessee filed an appeal. The Appellate Tribunal allowed the appeal and cancelled the penalty, holding that the assessee had been able to discharge the onus placed on it by the Explanation to s. 271(1)(c) of the Act, that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present application. In order to determine whether the conclusion of the Tribunal that the assessee had rebutted the statutory presumption raised by the Explanation to s. 271(1)(c) of the Act is based on any evidence or not, it will be appropriate to extract the relevant part of its order : " In our opinion, the onus that lies on the assessee should be considered to have been discharged, firstly, because it was Shri Ved Parkash who made the payment of Rs. 28,575 on behalf of the assessee to the Punjab National Bank on December 4, 1967. Shri Ved Parkash was interested in seeing that a draft was purchased because by getting the transaction in respect of 75 bags of sugar completed, his firm was to be benefited by Rs. 8,550. The fact that Shr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ooks of a third party, i.e., M/s. Giga Ram Kapur Chand, confirmed that Rs. 16,900 was paid to the assessee on December 4, 1967, and when there is no evidence that the books of that party were not maintained in the normal course of the business, the evidence of Shiv Narain must be accepted that Rs. 16,900 was paid by them to the assessee on December 4, 1967. It cannot be inferred that M/s. Giga Ram Kapur Chand made a false entry in their books of account to show that Rs. 16,900 was paid to the assessee on that day. The second amount is Rs. 15,000 which was received by the assessee from M/s. Dhanna Mal Ram Sarup and the cash book of M/s. Dhanna Mal Ram Sarup clearly shows that Rs. 15,000 was paid to the assessee on December 4, 1967. An effort ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,000 which was to be paid at Muzaffarnagar. Considering the preponderance of probability, we hold that the onus that lies on the assessee had been discharged. There is, therefore, no reason to levy any penalty in this case." On the material available on record and more particularly the affidavits of Shri Shiv Narain, partner of Messrs. Giga Ram Kapur Chand, Rohtak, and Shri Kapur Chand of Messrs. Sita Ram Suresh Chand, Hissar, and the books of account of Messrs. Dhanna Mal Ram Sarup, Rohtak, and Messrs. Giga Ram Kapur Chand, Rohtak, the Appellate Tribunal recorded a finding of fact, that on the morning of December 4, 1967, the assessee had about Rs. 40,000 in cash with it. It also concluded that since Messrs. Ram Lal Chandan Lal, Muzaffar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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