Decided on September 20,1994



N.K. Agrawal, Member - (1.) IN this appeal by the assessee for assessment year 1980-81, the only substantive ground is against confirmation of penalty by the CIT(A). The Assessing Officer levied penalty of Rs. 28, 800 Under Section 271(1)(c) of the INcome-tax Act for concealment of income.
(2.) Return was filed declaring income at Rs 1, 02, 491. The assessee derived income, as a partnership firm, by dealing in cloth on wholesale basis. The A. O. noticed, on the basis of certain information collected from the Punjab and Sind Bank, that four bank drafts had been sent by the assessee-firm to one Sh. Baljit Singh at Ahmedabad. Each draft was for Rs. 5, 000. One draft was purchased by Amrik Singh, who was the son of the partner, Sh. Ram Singh. The other three drafts were purchased by the partner, Sh. Manmohan Singh. The A. O. made enquiry at Ahmedabad and noted that the four drafts had been deposited/credited in the books of M/s Karamjit Singh Baljit Singh. But these four drafts did not find any mention in the books of account of the assessee-firm. The AO, during the investigation at Amhedabad, recorded the statement of Sh. Pritam Singh, who happened to be available there and who was a partner of the assessee-firm. Sh. Pritam Singh, in the first instance, did not give any incriminating evidence in respect of the four drafts in question. But after two days, Sh. Pritam Singh made a confessional statement in a letter/application dated 27-1-1982. The A. O. proceeded to make an addition on the basis of that confessional statement. Statement of one Sh. Baljit Singh was also recorded at that time. This addition was initially deleted in the assessee's appeal by the CIT(A), but in the revenue's appeal, the Tribunal sustained the addition made at Rs. 20, 000 to the income of the assessee-firm. The A. O. proceeded to initiate penalty for concealment of income. Penalty was imposed at 200 per cent of the amount of tax sought to be evaded. The Id. counsel has argued before us that the addition appears to have been sustained only on the ground of the confessional statement made by the partner, Sh. Pritam Singh. He has pointed out that Sh. Pritam Singh was examined by the A. O. at Ahmedabad on 25-1-1982 but no confession was made. Thereafter, Sh. Pritam Singh is said to have given his confessional statement in a letter dated 27-1-1982. The Id. counsel has contended that a prosecution was also launched against the assessee-firm and its partners in a criminal court and there Sh. Pritam Singh again gave a statement wherein he retracted his confession. The Id. counsel has submitted some additional evidence before us and has filed an application for admitting that additional evidence. The Id. D. R. has opposed that application seeking permission to file additional evidence. Since the statement of Sh. Pritam Singh in criminal court is sought to be referred now by way of additional evidence, we find it appropriate to consider the application of the assessee first and, thereafter, to discuss the merits of the case.
(3.) THE Id. counsel has filed copies of statements recorded by the A. O. during the course of investigation. In paperbook volume 1, copies of statements of S/Sh Pritam Singh, Baljit Singh and Ram Singh have been filed. Copies of assessee's reply to the penalty notice filed before the A. O. as well as written statement presented before the CIT(A) also form part of the paperbook Volume 1. In paperbook Volume II, copies of statements of Sh. K. S. Partap ITO, Sh. Hari Kishan ITO, Sh. Pritam Singh partner of the assessee-firm and Sh. Manmohan Singh another partner of the firm, have been attached. THEse statements are said to have been given in criminal trial launched against the assessee-firm and its partners under the Income-tax Act for concealment of income. THE Id. counsel has stated that the papers contained in the paperbook Vol. 1 are not by way of additional evidence because these are simply statements recorded during investigation by the A. O. So far as the statements given before the criminal court are concerned, these are indeed additional evidence and are sought to be filed on the ground that these came into existence subsequently. THE Id. counsel has argued that since the prosecution had been launched for concealment of income, the statements recorded by the court in that prosecution are highly relevant and should be allowed. THE Id. D. R. has, in reply, submitted that the additional evidence cannot be allowed on account of delay because the assessee did not file these statements in penalty proceedings.;

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