COMMISSIONER OF INCOME TAX Vs. JEWELS PARADISE

JUDGEMENT

(1.) The Income Tax Appellate Tribunal, Bangalore Bench, has stated a case and referred the following question of law for the opinion of this Court.

(2.) On 6-9-1963, the Central Excise Authorities conducted a raid under the Gold Control Order of the assessee's shop and also the residence of the partners. The partners were all staying together. At their residence, an amount of Rs.1,42,000 was found. At the shop a sum of Rs.76,970 was found. The books of account of the assessee as on 6-9-1963 showed the existence of cash of Rs.1,37,828-84. Thus, an excess cash of Rs.81,142 was found at the time of the raid. The explanation of theassesses in regard to this amount was that they were amounts withdrawn in the earlier years and amounts of dowry received on the occasion of the marriage of the partners. It was contended that the amount was with them for the past 8 years. The Income Tax Officer did not accept the explanation. He included the amount of Rs.81,142 in the computation off the total income under S.69A of the Income Tax Act, 1961 The appeals preferred by the assessee contesting this addition before the Appellate Assistant Commissioner and the Appellate Tribunal failed.

(3.) In view of the addition made, the ITO initiated proceedings under S.271(1) (c) of the Income Tax Act, 1961; on the, ground that minimum penalty imposed would exceed Rs. 1,000, he referred the matter to the Inspecting Asst Commr. He relied upon the assessment made for the year and the same being confirmed by the appellate authorities and as the said amount had been included under S.69A and the explanation given by the assessee was not acceptable, he came to, the conclusion that the assessee had concealed the income and therefore was liable for penalty under S.271, (1) (c). He imposed a penalty of Rs.30,000.