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TMI Blog1982 (9) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... April I 1, 1967, issued by one Shri K. N. V. Narayanan, to Shri Abbas, one of the assessees, which contained on the reverse certain details of the cost of the house, stamp and lawyer's fees, etc., written in the assessee's own handwriting. There were certain receipts issued by the Madras State Housing Board to Abdul Khader, one of the assessees, and they were also recovered. On the same day, Abdul Khader, one of the assessees, who was present at the time of the search by the Enforcement Directorate, was examined. He gave a statement before the officers who made the search. In that statement be admitted that he had on the previous day paid Rs. 2,000 to a lady from Ceylon, who came to Madras. When questioned about the source of the purchase price paid in respect of Motilal Street property, he had stated that the sale price was paid from and out of loans raised from four persons at the rate of Rs. 10,500 each and the said loans has not been discharged. As regards the property at 32, Sarojini Street, Madras, he has stated that the assessees have purchased the said house jointly in the names of their wives, that the value of the house was Rs. 68,000 excluding the stamp value of Rs. 4,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purchase of the property. Four confirmatory letters from four persons out of six lenders for total loan of Rs. 24,000 out of Rs. 30,000 had been produced. A letter for the sale of jewels was also produced before the ITO. Thereupon, certain discussions took place between the ITO and the representative of the assessees and the assessees filed their revised returns on June 13, 1969. In the revised return, A. Abbas returned a sum of Rs. 17,000 as income from other sources and the said sum of Rs. 17,000 comprised (1) improvements to building not explained; and (2) other items Rs. 14,500. Thus, the aggregate of income from undisclosed sources, property and business was Rs. 28,232. Abdul Khader also filed a revised return showing income from other sources of Rs. 29,518 and the aggregate income including from all sources at Rs. 27,674 (sic). For the assessment year 1968-69, A. Abbas returned income from "Other sources " at Rs. 28,955, the total income in the revised return being Rs. 33,111 made up of income from other sources, income from business and income from property. We are not concerned in these cases with the figures of income furnished by the two assessees as income from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of their written explanations and after hearing their representation, the IAC came to the conclusion that a sum of Rs. 15,500 representing unexplained income (utilised) for (purchase of) Motilal Street house property is an item of concealment for the assessment year 1967-68. He, however, held that the sum of Rs. 1,500 for poor drawings was not an item of concealment. For the assessment year 1968-69, the IAC left out of account Rs. 3,000 added by the ITO on account of poor drawings, but held that a sum of Rs. 25,955 has been concealed by the assessee. According to the IAC, apart from the presumption contained in the Explanation to s. 27 l(1)(c), there is clear material available in the case to prove concealment of income, to the extent indicated above. In that view, the IAC felt that s. 271(1)(c) of the I.T. Act stood attracted and levied penalties of sums of Rs. 15,500 and Rs. 25,955. The assessees took up the matter in appeal to the Income-tax Appellate Tribunal, Madras. Before the Tribunal the assessees contended that as the assessment was made on agreed basis, there is no warrant for invoking the provision of s. 271(1)(c) of the Act, that in any event the assessees having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsideration of Rs. 26,910, the levy of penalty was held justified to the said extent. In that view, the Tribunal while vacating the order levying penalty for 1967-68, sustained the levy of penalty to the extent of Rs. 5,455 for the year 1968-69, so far as one assessee, A. Abbas, is concerned and Rs. 2,563 so far as the other assessee, Abdul Khader, is concerned. Aggrieved by the order of the Tribunal, the Revenue has come up before us after getting a reference on the following question of law I " Whether, on the facts and in the circumstances of the case, where, in the course of assessment an assessee agrees to addition of certain income and on that agreement the related income is brought to charge, it amounts to concealed income so as to attract penalty ? " From the facts stated above, it will be seen that the Tribunal actually went into the question as to whether there was in fact concealment by the assessees in this case in respect of both the assessment years. The Tribunal after considering the various items which formed the subject-matter of assessment, found that for the assessment year 1967-68, there was no justification for holding that there was concealment as has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... flect the dispute between the parties. The question as framed proceeds on the basis that wherever the assessee agrees to an addition being made to the income returned by him and on the basis of the agreement the related income has been brought to charge, it may not amount to concealment merely on the basis of the assessee's acceptance. As a matter of fact, the Tribunal in this case has not proceeded merely on the basis of the assessees' admission of certain amounts as his income. The Tribunal has in fact proceeded on the basis that though certain additions had been made on an agreed basis, it cannot be the sole ground for initiating proceedings under s. 271(1)(c) and it has decided the question of concealment on the materials available in this case. In our view, the question as framed does not appear to arise from the order of the Tribunal since the Tribunal itself has not proceeded only on the basis of the assessment which has been made on agreed basis. We have to, therefore, reframe the question to reflect the exact dispute between the parties in these cases and we reframe the question accordingly as follows : " Whether, on the facts and in the circumstances of the case, the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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