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 1950-51 to 1953-54 - Additions to assessee's total income were made on basis of accretion to wealth and penalty for concealment of such income was imposed - Tribunal deleted penalty by observing that in arriving at net accretion of wealth, savings of assessee in preceding years had not been taken into account and that there was an element of estimate as to amount and as to periods to which income was referable - Whether accretions to wealth unless properly explained could be taken as evidence of concealment of income - Held, yes - Whether in absence of finding that there was no concealment of income in respect of relevant assessment years merely on ground that in reassessment proceedings there was only an estimated ad hoc addition made in respect of each year, Tribunal was not correct in holding that section 28(1)(c) of 1922 Act was not applicable - Held, yes -Whether it was necessary for Tribunal to find out accretion to wealth in each particular assessment year - Held, yes - Whether, therefore, matter was to be remitted to Tribunal for disposal afresh - Held, yes (-Matter remitted) FACTS As the assessee had not maintained proper accounts, his income for the assessment years 1950-51 to 1953-54 from hotel business was assessed on an estimate basis. During the assessment proceedings for 1958-59, a wealth statement was obtained from the assessee. It came to light that the assessee purchased in March, 1954, a property in the name of his wife for Rs. 30,000. Further, a decree was obtained in a suit filed against legal representatives of 'R' for recovery of Rs. 50,000 due to assessee under a pronote. It was also found that there were six chit transactions with a bank in the name of assessee and his relatives. When assessee was asked to explain the origin and source for pronote loan and other transactions, he made explanations on different dates. The ITO, however, not feeling satisfied, re-opened the assessments under section 34(1)(a) of the 1922 Act. Thereupon, the Income-tax Officer held that…

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