Law:

Section:

Section 271(1)(c) of the Income-tax Act, 1961 [Corresponding to section 28(1)(c) of the Indian Income-tax Act, 1922] - Penalty - For concealment of income - Assessment years 1958-59 to 1960-61 - In assessment proceedings ITO took cost of construction of building at Rs. 3,20,000 as against Rs. 1,92,544 disclosed by assessee and taking other income and expenditure of assessee, added certain sum to income of assessee - Based on said addition, assessee was also subjected to penalty for concealment of income - On appeal before Tribunal assessee pointed out that ITO's determination of cost of construction of properties being based only on an estimate was not proper - Tribunal, however, rejected said contention observing that assessee's figure was also an estimate - Whether since method adopted by ITO to estimate cost of construction of property was not clear and Tribunal had not gone into objection raised by assessee regarding cost of construction, conclusion that assessee had concealed particulars of his income could not follow - Held, yes - Whether therefore, Tribunal ought to go into question of cost of construction de novo - Held, yes FACTS The assessee estimated the cost of construction on a site belonging to him at Rs. 1,92,544 and obtained a valuation report from a retired railway engineer estimating the cost of construction at Rs. 1,66,800. The assessee was asked to furnish further details relating to the statement of wealth. He did not respond. In a letter dated 13-11-1961, the assessee was asked to file full details of the site area, plinth area of construction, the date on which the construction was completed and the course of construction during the several years. The assessee was also asked to produce the accounts relating to the building construction. There was no response to this letter also. The assessee's authorised representative appeared before the ITO and informed him that the assessee had not furnished him the required particulars and pleaded helplessness in the matter. The ITO inferred that the assessee was refraining from furnishing particulars deliberately for reasons best known to himself. After referring to the nature of the construction and…

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