Law:

Section:

Section 271(1)(c) of the Income-tax Act, 1961-Penalty-For concealment of income-ITO brought to tax in assessee's hands income of assessee's wife from a concern said to belong to her and also hundi loans, etc., credited in concern's books, on the ground that wife was benam1dar of assessee which fact had been conclusively established during proceedings for earlier assessment year-Details of such income available in return filed by wife-IAC imposed penalty for concealment in respect of said additions-Tribunal deleted penalty in respect of income from hundi loans, etc., holding that there was no concealment as they were disclosed in return, but upheld penalty of income from concern on the ground that ITO had conclusively proved that wife was benamidar-Whether Tribunal justified-Held, on facts, yes Facts For the assessment year 1964-65, the ITO brought to tax in the hands of the assessee, an income of Rs. 9,154 declared by his wife in her return, being income from a concern belonging to her, on the ground that during the assessment year 1962-63 he had concluded, after making detailed investigations, that the business of the said concern was a benami of the assessee and this conclusion had not been negatived by the assessee by any evidence. He also treated as assessee's income the hundi loans of Rs. 62,500 credited in the concern's books, which were also exhibited in his wife's return. The ITO also disallowed interest of Rs. 13,790 on hundi loans and further added another amount of Rs. 13,791 in respect of all credits in suspense accounts. All these additions were based on findings by the ITO to the effect that the genuineness of the hundi loans were not proved and that the wife was merely a benamidar of the assessee. The additions were upheld both by the AAC and the Tribunal. The IAC imposed penalty on the undisclosed income comprising all the additions made. On appeal, the Tribunal held that there was no concealment so far as hundi loans were concerned since they were exhibited by the assessee's wife in her return, and that similar view must be taken regarding interest (which was not proved false) and other credits. Regarding the inclusion of the income of Rs.…

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