RAJINDER NATH Vs. KHOSLA M L ITO

JUDGEMENT

(1.) THIS is an application under S. 482, CrPC, for quashing the complaint and the proceedings filed by respondent No. 1 against the petitioner under S. 277 of the IT Act (hereinafter referred to as "the Act") now pending in the Court of a Metropolitan Magistrate, Delhi.

(2.) THE undisputed facts of the case are that the petitioner is a director of M/s Tools and Equipment (P) Ltd. (hereinafter referred to as the "the assessee"). The assessee submitted the return of income for the asst. year 1973 -74 in August, 1973. During the course of examination of the accounts of the assessee, it was noticed that the assessee had purchased machine components worth Rs. 34,102 from its allied concern, M/s Express Exports and Engineers (P.) Ltd. (for short, the "allied concern") on 26th March, 1973. As the same did not find place in the list of raw materials lying with the assessee in the factory, it was asked to explain, (i) details of the components, (ii) date on which the same were given by the assessee. In response to the same the assessee -company's managing director, chartered accountant and the accountant put in appearance and confirmed that the said goods were covered in the list of raw materials lying in the factory of the assessee. Thereupon, they were required to furnish a copy of the list of raw materials which was accordingly submitted by the assessee's accountant, Shri R. S. Wadhwa, on 2nd Feb., 1976, showing the total raw materials lying in the factory at Rs. 80,168. However, further scrutiny of the assessment records revealed that the assessee had already filed one such list of raw materials lying in the factory and the same contained entirely different particulars of the articles lying in the factory from the list subsequently submitted by the assessee. The details of these lists are as under :

(3.) THE ITO was not satisfied with the explanation furnished by the petitioner and the accountant of the assessee with regard to the circumstances under which list 'B' was compiled. He felt that the action of the managing director of the assessee as also the petitioner in filing an entirely new set of details with their approximate value as per statement marked 'B' above as against the details furnished earlier was nothing but an attempt to show that the machine components purchased by the assessee from its allied concern on 26th March, 1973, existed in the closing stock even though the same had not been shown by them in the original statement marked 'A'. Hence, he concluded that the assessee had concealed particulars of its income by not accounting for the components of machinery so purchased and he made a trading addition of Rs. 34,102 to the taxable income of the assessee on account of its being concealed income, vide order dt. 10th March, 1976.