CHANDRA PRASAD LIQUOR Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE appellant/assessee has preferred this appeal under Section 260A of the IT Act, 1961 (for short 'the Act') against the order of the Income Tax Appellate Tribunal (for short 'the Tribunal'), Jabalpur Bench, on following substantial questions of law :

(2.) BRIEFLY stated facts of the case are that the appellant firm filed its return for the asst. yr. 1993-94 declaring income of Rs. 6,12,700 on the basis of audited account making certain adjustments. The AO issued notice under Section 142(1) as well as under Section 143(2). The assessee failed to comply with the various queries raised by the AO during the course of assessment proceedings. He was called upon to produce books of account and other documents maintained by him in respect of the business, however, the assessee did not produce it on the pretext that the accountant, who maintains books of account, is absconding. The AO not accepting the explanation held that the assessee failed to comply with the terms of notice under Sections 142(1) and 143(2) and accordingly, proceeded to make best judgment assessment under Section 144 and made a lump sum addition of Rs. 3 lakhs on the profit disclosed by the assessee.

(3.) THE assessee preferred an appeal against the imposition of penalty, however, the CIT(A) dismissed the appeal with an observation that the addition made by the AO has been subsequently confirmed by the Tribunal. THE assessee did not give any satisfactory explanation despite several opportunities granted to him by the AO. THE assessee did not file any document to justify the quantum as well as the nature of expenses in respect of which disallowance was made by the AO even in the penalty proceedings and thus, he was guilty of concealment of income. THE second appeal was also dismissed by the Tribunal with an observation that there is no explanation on record by the assessee as to how the expenditures claimed were not excessive or the expenditures claimed were in relation to the business of the assessee and were of allowable in nature while computing the business income. In the absence of any explanation from the assessee, the provision of Expln. 1 to Section 271(1)(c) is applicable, which lays down that the assessee is guilty of concealment of particulars of income in such circumstances and it is a deemed concealment.