Law:

Section:

Section 271(1)(c) of the income-tax act, 1961-Penalty-Imposable for concealment of income-addition of rs. 27,200 made to trading account and deposits of rs. 9,000 by partners treated as income of assessee-firm-AAC accepted assessee's plea that deposits be telescoped into addition made in trading account and deleted addition-Whether alternate plea of assessee for telescoping, amounted to admission of concealment of income warranting imposition of penalty-Held, no Facts In the assessment for the assessment year 1966-67, the ITO made an estimated addition of Rs. 27,200 in trading account. The assessee had shown total deposits of Rs. 9,000 in the names of all the six partners. The ITO added this amount also as income of the firm for want of necessary and conclusive evidence. Both the additions were disputed in appeal. Regarding the deposits, the assessee claimed that they were out of partners' past savings and, alternatively, the assessee should be given the advantage of telescoping this amount in view of the substantial additions made in the trading account. The AAC upheld the trading additions but deleted the addition made on account of partners' deposits accepting the assessee's alternate plea. In the penalty proceedings under section 271(1)(c), the IAC held that in view of the request before the AAC for telescoping, it was inferred that the assessee had admitted the concealment in respect of the deposits and penalty for concealment was, therefore, levied. In appeal, the Tribunal held that by mere falsity of explanation, it could not be inferred that the assessee had concealed the amount or furnished inaccurate particulars. The penalty was, accordingly, deleted. On reference : Held The order of the IAC does not refer to any material which would show that the assessee had admitted in so many words that the trading earnings had been falsely introduced in the shape of deposits in the name of its partners. By merely asking for the benefit of telescoping, the assessee was not admitting having furnished false accounts but was merely trying to buy peace. The onus was on the Department to show that the failure to return the correct income was the result of any fraud or…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492