COMMISSIONER OF INCOME TAX Vs. OUTDOOR PUBLICITY

JUDGEMENT

(1.) Heard senior counsel Sri P.K. Ravindranatha Menon, appearing for the appellant and Sri P. Balakrishnan, counsel appearing for the respondent assessee. Appeal arises from Annex. E order of the Tribunal sustaining cancellation of penalty levied under Section 271(1)(c) of the IT Act by the CIT(A). During the asst. yr. 1982-83, the assessee, which was carrying on business in advertising, took over a film produced by one of its partners, who later died. By the time the film was taken over by the firm, it had run a few months and proved that loss was inevitable. While completing the assessment of the firm, the AO found that the firm, by taking over the film only tried to reduce its tax liability and therefore disallowed the loss in film business and demanded tax. The assessment was sustained in first appeal and it is submitted by respondent's counsel that the order of the appellate authority was accepted and tax was paid by the assessee.

(2.) After completion of the assessment, the officer initiated penalty proceedings for concealment of income under Section 271(1)(c) of the IT Act. The officer found that the assessee deliberately evaded payment of tax by taking over the business in film, which according to him, is only a make-believe and in the absence of a proper explanation penalty was levied However, the CIT(A) by a detailed order held that there is no concealment of income inasmuch as the assessee had furnished full particulars of income and nothing was concealed or suppressed. This finding of the CIT(A) was confirmed by the Tribunal. The Tribunal even rendered a finding that the assessee had offered an explanation and shifted its burden to the Department to prove concealment.

(3.) Senior counsel appearing for the Revenue cited decisions of this Court reported in CIT v. Gates Foam & Rubber Co. and in CIT v. K.P. Madhusudanan and the decision of the Supreme Court reported in CIT v. Panipat Woollen & General Mills Co. Ltd. 1976 CTR (SC) 317 : (1976) 103 TTR 66 (SC). The decisions cited by the senior counsel are not similar facts as in this case, though they pertain to penalty cases.