Law:

Section:

Section 147(a), read with section 68, of the Income-tax Act, 1961 - Reassessment - Non-disclosure of primary facts - ITO noticed six cash credits (including Rs. 13,000 and Rs. 15,000 in names of T and M, respectively) in assessee's books and accepted them as genuine - On M's subsequent statement before his ITO that all loans in his name were bogus and on surrender of certain other cash credits by various parties, ITO reopened assessment and added Rs. 76,359 as assessee's income from undisclosed sources - Tribunal confirmed reassessment proceedings and also upheld additions vis-a-vis cash credits of Rs. 28,000 in names of T and M - Whether tribunal right in law - Held, on facts, yes Section 271(1)(c) of the Income-tax act, 1961 - Penalty - For concealment of income - For concealment of cash credits, IAC imposed penalty which was reduced by tribunal and maintained qua certain cash credits - Whether tribunal right in law - Held, on facts, yes Facts For the assessment year 1964-65, relevant to the accounting year ending 17-10-1963, the assessee-firm filed its return on 29-6-1974. The ITO noticed six cash credits of Rs. 1,26,000 (including Rs. 13,000 and Rs. 15,000 in the names of T and M, respectively) in assessee's books of account. He accepted them as genuine on assessee's production of creditors' confirmatory letters and completed the assessment on 15-1-1966. On 22-3-1968 M disposed before his ITO to the effect that all the loans in his name were bogus and that he merely lent his name to the concerned parties for introducing their secretive and unaccounted for moneys in the guise of hundi loans. Thereafter, the ITO also found that, consequent upon certain raids, various other parties had also surrendered certain cash credits. In reassessment proceedings initiated under section 147(a ), the ITO added Rs. 76,359 (including interest of Rs. 359) to assessee's income from undisclosed sources after rejecting its contention, inter alia, that the impugned loans were genuine and that it had duly disclosed all the material facts to the ITO. The AAC sustained the ITO's order. On further appeal, the Tribunal observed ( i) that the assessee had not disclosed in its original…

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