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TMI Blog1983 (9) TMI 105X X X X Extracts X X X X X X X X Extracts X X X X ..... purchase and sale of cloth. He was not assessed to tax. After his death, estate duty proceedings were initiated against his widow Smt. Darshan Kaur, the present assessee before us. The Assistant Controller of Estate Duty found that the deceased had fixed and other deposits to the extent of about Rs. 78,000. All these deposits were included in the estate of the deceased for the purpose of estate duty. The Assistant Controller also estimated the investment in this business at Rs. 40,000. It may be stated here that the deceased had not maintained any books of account for his cloth business. While making the assessment, the Assistant Controller also observed that the deceased must be having annual income of about Rs. 20,000. It was on this bas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessments had been made on an income of Rs. 20,000 in each of the years under consideration only on an estimate which did not suggest any concealment. The ITO, rejecting these contentions, levied penalties under the Explanation to section 271(1)(c) at Rs. 15,000 each for the assessment years 1967-68 to 1971-72 and Rs. 14,000 each for the assessment years 1972-73 and 1973-74. In particular, he referred to the deposits found and taxed in the estate duty assessment. He also observed that late Madanlal was having income only from cloth business and unless he earned good income, it was not possible for him to make the above deposits. 5. The assessee appealed to the AAC. The AAC was of the view that proper enquiries had not been made in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in banks and other institutions amounting to about Rs. 78,000 clearly went to show that he was having a good income from the cloth business. He further contended that since the declared incomes were of Rs. 8,000 and Rs. 9,000 only in different years, it had to be accepted that they were not the correct incomes. He further submitted that the Tribunal had estimated the above incomes at Rs. 14,000 in the assessment years 1967-68 to 1971-72 each and at Rs. 14,500 in the assessment years 1972-73 and 1973-74 each. According to him, since the declared income was less than 80 per cent of the assessed income of each year, the Explanation to section 271(1)(c) was attracted. He argued that the AAC had wrongly placed the burden of proving that the ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion created by the Explanation, is to convert a case where the assessed income is more than 80 per cent of the returned income into a case which is covered by section 271(1)(c) (sic) unless the assessee proves that he was not guilty of any fraud or gross or wilful neglect in filing the return of income. However, the Explanation exhausts itself once this purpose is achieved and does not create any further fiction to the effect that the assessed income has to be taken as the correct income for the purpose of imposition of penalty under section 271(1)(c)(iii). For purposes of fixing the quantum of penalty, the amount of income in respect of which particulars have been concealed or inaccurate particulars have been furnished has to be found by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see. The High Court had that there was ample material for the finding of the Tribunal that the assessee was not guilty of gross or wilful oversight. This case squarely covers the case in appeal before us also. In the case before us also, incomes had been estimated from cloth business without pointing out any omission on the part of the assessee or her late husband Madanlal. We, therefore, hold that they cannot be held guilty of any fraud or gross or wilful neglect in not returning the income correctly. We may observe that the above case of Chatur Singh Taragi was again approved by the Allahabad High Court in the case of Addl. CIT v. Lakshmi Industries & Cold Storage Co. (P.) Ltd. [1983] 14 Taxman 144. The order of the AAC cancelling the pen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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