Law: Income Tax Act, 1961

Section: 256

(a) Income-tax----Income from undisclosed sources---Firm---Deposits in name of husband of one of partners---Admission by such person that he was controlling business of firm and that deposits belonged to firm---Amount assessable as income of firm. (b) Income-tax--- ----Penalty---Concealment of income---Burden of proof---Returned income less than 80 percent. of assessed income ---Assessee must prove that there has been no concealment of income---Tribunal erroneously placing burden of proof on Revenue-- -Matter remanded----Indian Income Tax. Act, 1961, S.271(1)(c). (c) Income-tax--- ----Reference---Reference at the instance of revenue ---Assessee cannot raise a question not raised before Income-tax Authorities---Question regarding validity , of notice of penalty not raised before Income-tax Authorities---Question could not be raised for first time before High Court---Indian Income Tax Act, 1961, S.256. The assessee-firm was engaged in business of Abkari contracts. One of its partners was P. The original assessment was completed on January 13, 1983,, on the net income of Rs.1,20,430. Subsequently, the Department conducted search operations in the office premises of the firm and the residential premises of partners on February 14, 1984. On the basis of the materials collected at time of search, the Department found certain bank accounts amounting to Rs.21,54,240 in the name of B. B. accepted that amount was traceable to the assessee-firm and that he was in full management of the business. B was Ps husband. In the course of the search, the Department has also come across the statement of division of profits both accounted an unaccounted in which it was shown that B had 4/21 share in the profits. The statement was signed by all the partners, thus, showing that they had accepted B as a partner. Additions were made in the reassessment based on the credits found in the bank account. The assessment was confirmed by the Commissioner in appeal and the, Tribunal. Penalty proceedings were also initiated and penalty was levied. The Tribunal set aside the order of penalty on the ground that the Revenue had not proved concealment of income. On a reference: Held, (i) that from…

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