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TMI Blog1977 (2) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal was right in holding that this was a clear case of concealment ? " The facts of the case may be briefly stated as follows : The assessee is a registered firm. The assessment years concerned are 1955-56 and 1956-57. For the assessment year 1955-56, the original assessment was made on March 31, 1956. Subsequently, assessment for the assessment year 1957-58 was made. Certain additions were made for that assessment year which were contested by the assessee on appeal before the Appellate Assistant Commissioner. The amount involved was Rs. 62,383 added to the trading accounts. The Appellate Assistant Commissioner found that there were large number of cash credits which appeared to be of suspicious nature. He also found discrepancie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellate Assistant Commissioner in the course of the appeal proceedings for the assessment year 1957-58 that a part of the concealed income for the earlier years had been introduced as cash credits in the assessment year 1957-58, the Income-tax Officer satisfied himself that the assessee had concealed the profits of the assessment years 1955-56 and 1956-57 and proceeded to reopen the assessment in order to assess the cash credits appearing in those two years. In the assessment year 1955-56 the cash credit involved was Rs. 22,577. This was due from two parties, namely, Sriput Talukdar and Hemchandra Deka. The interest on these loans credited was Rs. 2,785. In response to the notice calling for returns the assessee filed return on December 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nion that the assessee having admitted before the Appellate Assistant Commissioner that the cash credits represented income, the department was not required to do any further enquiry unless the assessee recanted the admission. He, therefore, held that the assessee had concealed income and imposed a penalty of Rs. 16,000 for the assessment year 1955-56 and Rs. 12,000 for the assessment year 1956-57. The assessee then went in appeal before the Income-tax Appellate Tribunal against both the quantum as well as the penalties levied for the assessment years 1955-56 and 1956-57. By a common judgment the Tribunal disposed of the quantum appeals as well as the appeals against the penalties for three assessment years, namely, 1955-56, 1956-57 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ddition in respect of them have to be made in view of the substantial additions made in the trading accounts. To this extent the assesee's suppressed trading profits have appeared in his books in the form of fictitious loans. In view of our above finding we direct that the addition of Rs. 22,577 in the assessment year 1955-56 and the addition of Rs. 27,000 in the assessment year 1956-57 should be deleted." It is found from the above observations of the Tribunal in the quantum appeals that the addition of Rs. 22,577, which represented the cash credits for the assessment year 1955-56, and the addition of Rs. 27,000, which represented the cash credits for the assessment year 1956-57, were deleted by the Tribunal. Thereafter, the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Rs. 22,577 from different parties were shown in the assessment year 1955-56 and to the tune of Rs. 27,000 from different parties were shown in the assessment year 1956-57 and these were admitted by the assessee before the Appellate Assistant Commissioner to be its trading profits and on that basis the Inspecting Assistant Commissioner held that there was a case under section 271(1)(c) of the Act for concealment of income. But when these two items of cash credits were deleted by the Tribunal from the two relevant assessment years, there remained nothing on the foundation of which the penalty proceedings might be initiated or the penalty might be levied. Mr. G. K. Talukdar, the learned standing counsel, finding this difficult position ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of those very two items. The question of interest, though has been discussed here and there, it did not form the basis of the penalty imposed. In that view, we hold that the penalties for both the assessment years cannot be sustained in law. In the result, we find that on the facts and in the circumstances of the case the Tribunal was not right in holding that the penalty under section 271(1)(c) was leviable in the instant case. Thus, we answer the first question of law in the negative and in favour of the assessee. Regarding the second question, we find that if the additions are fully deleted then there cannot be a clear case of concealment for the purpose of section 271(1)(c) of the Act, as in the instant case. The second questi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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