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TMI Blog2008 (1) TMI 267X X X X Extracts X X X X X X X X Extracts X X X X ..... ant. Arikkat Vijayan Menon, Harisankar V. Menon and Smt. Meera V. Menon for the respondent. JUDGMENT The judgment of the court was delivered by C. N. RAMACHANDRAN NAIR J.— 1. This is an appeal filed by the Revenue under section 260A of the Income-tax Act, 1961, challenging the order of the Income-tax Appellate Tribunal confirming the cancellation of penalty levied under section 271(1)(c) of the Income-tax Act, 1961. The respondent-assessee is a private limited company deriving income from chitty business. During the verification of accounts in the course of assessment for the assessment year 1990-91, the Assessing Officer noticed an outstanding credit balance of Rs. 4,55,863 shown as liability in the balance-sheet for kuries ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0A of the Income-tax Act. Even though four questions are raised for decision by us as arising from the Tribunal's order, we find in substance the only question that arise from the Tribunal's order is whether the Tribunal in the absence of any bona fide explanation offered or established by the assessee was justified in casting burden of proof on the Revenue to prove concealment and to cancel the penalty on the ground that the Assessing Officer has not established the nature of concealed income assessed by him in respect of which penalty is levied. 3. The undisputed fact in the case is that the assessee who has been engaged in the chitty business, showed a credit balance of Rs. 4,55,863 in the balance-sheet in respect of kuries terminate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bona tide explanation for the show-cause notice, the Assessing Officer by virtue of Explanation 1 contained in section 271(1)(c), levied penalty for concealment of income. The first appeal filed by the assessee is allowed following the order of the Tribunal in another kuri case. 4. Learned standing counsel appearing for the Revenue contended that Explanation 1 to section 271 (1) (c) is clearly applicable in this case because the assessee admittedly did not offer any explanation except by stating that the credits in the balance-sheet represent liabilities. On the appellant's side the decision of the Supreme Court in K. P. Madhusudhanan v. CIT reported in [2001] 251 ITR 99, the decisions of this court in Deputy CIT v. K. Sur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esult thereof shall be the income in respect of which the assessee has concealed the particulars as already stated. This is a case where the additions proposed or credit shown in the balance-sheet as liability pertaining to kuries terminated during 1977 to 1983. It was for the assessee to explain how the entries represent liability for the assessee. Even though the Tribunal has already accepted this position in the assessment appeal, the Tribunal cancelled the penalty for the reason that the Assessing Officer failed to explain the nature of concealed income. We are of the view that the Tribunal wrongly cast the burden on the Department and against the statutory provision. Only the assessee can explain the entries in the balance-sheet and in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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