Law: Income Tax Act, 1961

Section: 271,271(1)(c),256

Income-tax----Penalty---Concealment of income---Failure to furnish particulars of brokers through whom purchases made---Failure to produce purchase and sale registers and stock register---Assessing Officer finding some purchase bogus ---Assesssee himself admitting concealment of income to extent of bogus purchases---Concealment proved---Levy of penalty valid---Indian Income Tax Act, 1961, S.271(1)(c). The assessee filed a return of income declaring a total income of Rs.2,10,460. Thereafter, revised returns were filed showing income of Rs.3,76,920 and Rs.4,21,920. The Income-tax Officer issued notices to the assessee for levy of penalty under section"271(1)(c) of the Income Tax Act, 1961, for concealment of particulars of income on the ground that purchases made by the assessee aggregating to Rs.1,61,459 were bogus. The assessee explained that purchases had been made through brokers and there was no direct link between the assessee and the suppliers, and therefore, the suppliers could not be identified. The Assessing Officer, however, held that despite sufficient opportunity being given to the assessee to produce purchase and sale registers and the stock register coupled with the stock inventories for the relevant period, the assessee could produce only the stock inventory, that neither the purchase and sale registers nor the stock register showing the day-to-day stock position was produced, that even the names and addresses of the brokers through whom the purchases were said to have been made were not furnished, that the assessee himself had stated before the Assessing Officer that if at all there was concealment with regard to bogus purchases, it could be taken at Rs:1,61,459, that during the search operation at the assessee's premises it was discovered that the assessee had understated stock to the extent of Rs.3.5 lakhs and that in the successive revised returns the additional income was declared by the assessee having known that the Department had discovered the bogus purchases. The Assessing Officer imposed a penalty of Rs.1,05,730 under section 271(1)(c) of the Act. The assessee's appeal before the Appellate Assistant Commissioner and the Tribunal failed.…

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