LOKHAND WALA T A Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE questions referred for the decision of this court are the following :

(2.) WHETHER the Income-tax Appellate Tribunal, in the absence of an appeal by the department, could impose a penalty with respect to item No. 2, regarding business profits in respect of which the petitioner had been absolved of any liability as per the order of the Inspecting Assistant Commissioner ?"

(3.) THE Tribunal partly allowed the assessee's quantum appeal and reduced the addition under the head "Accretion to capital" to Rs. 33,962 against the addition of Rs. 1,19,220. THE addition of Rs. 28,000 under the head of "Investment in properties" was, however, retained. THE total addition under these two heads was, therefore, reduced to Rs. 61,962 (annex. "C"). In the other appeal filed by the assessee against the imposition of penalty the Tribunal by its order dated December 8, 1967 (annex "E"), came to the conclusion that the two additions under the heads of "Accretion to capital" and "Investment in properties" do not attract any penalty and the same were, therefore, set aside. THE Tribunal, however, proceeded to levy penalty on the addition of Rs. 35,258, made under a different head. namely, business income, in respect of which the IAC had not imposed any penalty and no proceeding was taken by the department by way of an appeal or cross-objection.