COMMISSIONER OF INCOME TAX Vs. P B SHAH AND CO PVT LTD
LAWS(CAL)-1976-8-26
HIGH COURT OF CALCUTTA
Decided on August 02,1976

COMMISSIONER OF INCOME-TAX Appellant
VERSUS
P.B. SHAH AND CO. (PVT.) LTD. Respondents





Cited Judgements :-

COMMISSIONER OF INCOME TAX VS. RAJARAM PANNALAL [LAWS(CAL)-1980-4-38] [REFERRED TO]
COMMISSIONER OF INCOME TAX VS. RELIABLE TRADING AGENCY [LAWS(CAL)-1981-4-31] [REFERRED TO]
COMMISSIONER OF INCOME TAX VS. PUNJAB TYRES [LAWS(MPH)-1986-7-31] [REFERRED TO]
COMMISSIONER OF INCOME TAX VS. KUMARI M DUBEY [LAWS(MPH)-1987-8-16] [REFERRED TO]
COMMISSIONER OF INCOME TAX VS. INDIA SEA FOODS [LAWS(KER)-1992-7-27] [REFERRED TO]
COMMISSIONER OF INCOME TAX VS. INDIA SEA FOODS [LAWS(KER)-1992-3-44] [REFERRED TO]


JUDGEMENT

Deb, J. - (1.)The following questions are involved in this reference under Section 256(1) of the Income-tax Act, 1961 :
"1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessment having been made under the Indian Income-tax Act, 1922, as provided in Section 297(2)(a) of the Income-tax Act, 1961, no penalty could be imposed under Section 271(1)(c) of the Income-tax Act, 1961, and in setting aside the order of penalty ?

(2.)Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the entire onus to prove that the cash credits represented concealed income of the assessee lay upon the department and whether the Tribunal was right in holding that the onus was not discharged and, therefore, no penalty could be levied ? "
2. The statement of the case relates to the assessment year 1960-61. The facts stated by the Tribunal may be briefly stated as follows: The Income-tax Officer was not satisfied with the genuineness of certain loans and accordingly brought Rs. 6,78,000 to tax as the income of the assessee from undisclosed sources. He also disallowed the interest alleged to be paid on that amount. In the penalty proceedings, it was found by the Inspecting Assistant Commissioner, for the reasons recorded in his order, that the assessee has deliberately concealed its income and has also furnished inadequate particulars of its income. Accordingly, he levied a penalty of Rs. 3,00,000. The assessee filed an appeal from the penalty order before the Tribunal. It was, inter alia, contended before the Tribunal by the department that the assessee had admitted that Rs. 70,388 was its undisclosed income and accordingly the penalty should be sustained at least to the extent of this amount. The Tribunal rejected that contention and allowed the appeal with a finding that the alleged admission was made only as an alternative argument as it was difficult for the assessee to procure materials to satisfy the authorities below that Rs. 70,388 was the loan obtained by the assessee.

(3.)Now, by following the judgment of the Supreme Court in the case of Jain Brothers v. Union of India [1970] 77 ITR 107, we return our answer to question No. 1 in the negative and in favour of the revenue.
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