- (1.) This income-tax appeal under s. 260A of the IT Act, 1961, has been preferred on the following questions of law : 1. Whether upon the fact and In the circumstances of the case, the Tribunal was justified in holding that the surrender of the amount of Rs. 2 lakhs, which resulted due to the mistake of the accountant in the books of account was a case of concealment of particular of income ? 2. Whether upon the fact and in the circumstances of the case, the Tribunal was justified in holding that the surrender of Rs. 2 lakhs by the appellant to be added to its income as extra profit was not bonafide and was not to purchase peace and avoid litigation ? 3. Whether upon the fact and in the circumstances of the case, the Department had discharged its burden to prove concealment ? 4. Whether upon the fact and in the circumstances of the case, the Tribunal was justified in setting aside the order of the CIT(A) deleting the penalty imposed under s. 271(1)(c), on surmises and conjectures ? 5. Whether upon the fact and in the circumstances of the case, surrendering the amount resulting due to the mistake of the accountant to be added as extra profit can be termed as fraud, willful neglect and concealment within the meaning of s. 271(1)(c) of the Act ? The assessee was a partnership concern with 14 partners pertaining to Banjara community. They were engaged in the business of running rice mill. For the asst. yr. 1992-93, they disclosed turnover of Rs. 56,57,959, giving a net profit of Rs. 70,837.
(2.) During the course of examination of the account books, the AO found that a cash receipt of Rs. 2,000 on 19th June, 1991 and payment of Rs. 2,000 on 20th June, 1991 were not entered in the cash book and were not posted in the ledger; cash receipt of Rs. 1,00,250 on 11th Oct., 1991 by bank draft by M/s Radhika Trading Company was entered In the cash book and was posted twice, once in the account of M/s Radhika Trading Company and other in the account of M/s Dinesh Chand Anuj Kumar, the Delhi based sister concern. The assessee could not explain the posting of the same amount at two places. On 21st Nov., 1994, a letter was filed by the assessee to explain that Rs. 1,00,250 received on 11th Oct., 1991, was rightly posted in the account of M/s Dinesh Chand Anuj Kumar. The AO found that an amount of Rs. 1,00,250 was wrongly posted in the account of M/s Radhika Trading Company, and added it to the income of the assessee, after turning down the explanation that the posting was made In the account of M/s Radhika Trading Company against the same receipt and against the payment of Rs. 1 lakh made by them on 21st Jan., 1992. In the bank account, no deposit of Rs. 1 lakh appeared on 21st Jan., 1992. The AO observed that the assessee had fraudulently reduced the liability.
(3.) The AO further found that cash receipt of Rs. 88,000 of M/s Radhika Trading Company, paid on 11th Oct., 1991, was not entered in the books of account of the assessee nor sale of Rs. 91,174.55 made to them on 9th Dec, 1991 appeared in the accounts of M/s Radhika Trading Company in the assessee's books. The assessee explained that the rice of Rs. 1,176.55 was sold, but the sale was cancelled and the goods were further sold to M/s Radhika Trading Company. These sales were wrongly posted in the account of M/s Vishnu Traders, Delhi.;