MALTI PRASAD (HUF) Vs. INCOME TAX OFFICER.

JUDGEMENT

(1.) THESE are cross -appeals by the assessed and the revenue respectively arising out of levy of penalty u/s 271(1) (c) of the Income Tax Act, 1961 for assessment year 1977 -78.

(2.) THE assessed is a HUF. Its previous year for asst. year 1977 -78 ended on 31 -10 -76. On 20 -8 -76 a search took place at the premises in which Malti Prasad, his wife Smt. Janki Devi, their unmarried daughters Vibha, Abha and Sudha and their minor son Sudhir alias Munna resided. Malti Prasad happens to be the karta of the present assessed. The search was authorised against a partnership firm M/s Malti Prasad and S/Sh. Malti Prasad, Jagdish Prasad, Vijai Prasad and Ram Prasad. In the portion occupied by Malti Prasad and his cash amounting to Rs. 1,28,085.00 and some gold and silver ornaments were found and were found and were seized. At the time of search Malti Prasad was examined on 20 -8 -76. He stated that the cash belonged to his wife who after selling some ornaments about 30 years ago started money -lending business. He also stated that the ornaments belonged to his wife and daughters. Ultimately the Income Tax Officer made the following additions to the income of Malti Prasad HUF :

(3.) IN the search, silver ornaments valued at Rs. 48,380 was found in the premises occupied by Malti Prasad, his wife and children. After enquiry the ITO held that about half of the quantity of silver ornaments could belong to the ladies of the house and hence he added Rs. 22,500 as the value of silver ornaments remaining unexplained.