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TMI Blog1999 (3) TMI 107X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the books of account of the assessee for that year and found out that the transactions relating to the petrol bunk viz., purchases sales and also expenses incurred, were not reflected in the said accounts. The Assessing Officer summoned Shri Bhupinder Raj, the Managing Director of the assessee-company and took a statement from him on oath. Shri Raj categorically denied the running of the petrol bunk by the assessee-company. On the other hand, he stated that he was aware that the erstwhile partnership firm M/s. S.M. Kannappa Automobiles was running the petrol bunk during the year 1975 when the business of the partnership was taken over by the assessee-company. He however admitted that the licence relating to running of the petrol bunk stood in the name of the assessee-company and the company itself owned the retail outlet dealership with Indian Oil Corporation Ltd. It was also stated by Shri Raj that at the time of taking over of the assets of the erstwhile firm by the assessee-company, the petrol bunk was run by M/s. Janatha Tourist, Gandhinagar, for about a year and subsequently, the business was discontinued as the company was not interested in continuing the business for va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21,164 and the said amount was added back in the aforesaid assessment. The assessment proceedings for the earlier years were also reopened, and the income from the petrol bunk not disclosed in the accounts or the returns of the assessee for all those different years was estimated and also assessed at the figure of Rs. 25,000 for assessment years 1978-79 to 1982-83. For assessment year 1985-86 again, the undisclosed income from the petrol bunk was assessed in the hands of the assessee-company at the figure of Rs. 24,126. Besides, in assessment year 1978-79, undisclosed investment in the petrol bunk to the extent of Rs. 57,720 was also added back in the assessment. The appeals filed by the assessee against all these additions for the successive years did not meet with any success at the end of the first appellate authority. The assessee however did not file any further appeals before the ITAT against confirmation of the additions by the first appellate authority. The learned counsel for the assessee appearing before us stated that the assessee never gave up its claim that no income from the petrol was ever earned by it and merely because of low amounts of tax effects, further appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring the course of the hearing of the further appeals filed by the department before us the learned DR has vehemently challenged the above findings and also the ultimate decision on the part of the CIT(A). He has strongly argued that the assessee had never disclosed the fact of owning the petrol bunk in any of its assessments upto assessment year 1982-83 and that during the course of examination of the accounts of the assessee, the Assessing Officer himself came to the knowledge that the assessee was owning the petrol bunk and thereafter alone he gathered further information relating to purchase of materials from IOC being in the name of the assessee-company. The learned DR also strongly argues that the decision of the Supreme Court in the case of Sir Shadilal Sugar General Mills Ltd. would not be applicable to the present case inasmuch as the assessee did not agree to assessment of the income from the petrol bunk in its hands, at any stage of the proceedings. In support of his contention in this regard, the learned counsel for the assessee has relied on some decisions, as discussed below --- (i) CIT v. Durga Prasad More [1971] 82 ITR 540 (SC). (ii) ITO v. Smt. Leela Mammen [ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He clearly admitted that he had not derived any income from this petrol bunk. Furthermore he also stated that the assessee-company paid the salary in respect of the employees of the petrol bunk. The learned DR thus contends that the assessee had taken two different stands about running of the petrol bunk viz., that earlier it was represented on behalf of the assessee that the HUF of Shri Bharat Bhushan Narang was running the petrol bunk whereas later stand of the assessee was that it was Shri S.K. Nanda who was running the same. The learned DR also showed that in the sales tax assessments of the assessee-company, the assessee-company itself has been subjected to sales tax in respect of the sales effected by the petrol bunk. 8. On the other hand, the learned counsel for the assessee Sri Parthasarathi firstly relied on the assessments in respect of the returns filed by Shri Bharat Bhusan Narang (HUF) owning the income from the petrol bunk. At the same time again, it is also claimed by Sri Parthasarathi that actually Shri S.K. Nanda ran the petrol bunk during the assessment year 1984-85 and later on. In support of the same, certain papers relating to the assessment position of Shr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact of running the petrol bunk, which is apparent, the onus would squarely lie on the assessee to prove to the hilt that the petrol bunk was not being run by it and was actually being run by somebody else. It is evident from the discussions above that two different stands were taken by the assessee relating to the running of the petrol bunk. On the one hand it has been the claim of the assessee that the HUF of Shri Bharat Bhushan Narang was actually running the petrol bunk. The returns filed under the Amnesty Scheme by the HUF have been claimed to support this contention. We agree with the contention of the learned DR in this connection that these returns do not at all lead to any conclusion about who was actually running the petrol bunk, especially when the returns were filed after the matter had been detected by the Assessing Officer and even the assessment for assessment year 1983-84 in which the income from the petrol bunk was for the first time assessed in the hands of the assessee-company, had also been completed about a year back. The other stand of the assessee-company is that Shri S.K. Nanda was actually running the petrol bunk. This stand is diametrically opposite to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other products from IOC and making payments in respect thereof, one has got to come to the conclusion in accordance with these apparent facts that the assessee must have been deriving the income from the petrol bunk also. When the assessee says that the facts were otherwise, the onus would lie very heavily on it to prove so. The facts as discussed above clearly show that the assessee has not, in any way been able to prove such other facts at all. 11. Ultimately therefore, the income from running the petrol bunk has got to be assessed in the hands of the assessee-company alone. The facts of the case cannot lead to any other conclusion. The same has also been the decision of the first appellate authority in the first appeals in all these years. Since the assessee never disclosed the income from running of the petrol bunk not only in any of its return of income, but also in any correspondences thereafter, the assessee must be considered to have concealed the particulars of this specific income in all its assessments for the different years under consideration. It is required to be noted in this connection that although the assessee filed certain revised returns under the Amnesty Sch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be constituted by the undisclosed investment of Rs. 57,720. We do not find much force in treating this amount as undisclosed income of the assessee. The Assessing Officer himself has discussed in the assessment order for assessment year 1983-84 that in the valuation report at the time of taking over the assets of the petrol bunk by the assessee-company from the erstwhile firm, the assets of the petrol bunk were mentioned and separate values thereof were also considered therein. The assessee is also stated to be being claiming depreciation on those assets. It is therefore quite evident that the assets of the petrol bunk are fully disclosed in the books of the assessee. So far as so-called investment in the petrol bunk is therefore concerned, it is merely based on probabilities. There is no definite evidence with the department to show that the assessee had actually made investment of this amount of Rs. 57,720 in the petrol bunk at the time of acquiring the same from the erstwhile firm. For the assessment year 1978-79 therefore, we direct that the penalty under section 271(1)(c) be computed on the basis of the concealed income of Rs. 25,000 from the Petrol bunk alone as considered in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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