COMMISSIONER OF INCOME TAX Vs. HANDLOOM EMPORIUM

JUDGEMENT

(1.) The Income Tax Appellate Tribunal has referred the following question of law under Section 256 (2) of the Income Tax Act, 1961 (hereinafter referred to as Act) for the assessment year 1981-82 for opinion to this Court.

(2.) The brief facts of the case are as follows:The assessee opposite party hereinafter referred to as 'assessee') was a partnership Firm and was carrying on the business of purchase and sales o f cloths and was also carrying on the business of money lending. Assessee filed return of income on 27.7.1981 showing loss of Rs. 3.660/- and thereafter. a search was conducted at the business premises on 23.9.1981 and also residential premises of the partner of the Firm under Section 132 and during the course of search. certain loose Purchas were found in which, transactions relating to the sales were found entered which were not found recorded in the books of account: In the loose paper. total entries towards debit side was at Rs. 90,411/- and on a credit side at Rs 31.659 - Assessee filed a revised return on 10.8.1982 showing an income of Rs. 2.360-. In the revised return, entries made in the loose Purchas at Rs. 90.41! -has been treated as the sale and on which. profit at Rs. 6,012/- has been calculated and accordingly, as against the loss income at Rs. 2.360/- was shown. Assessment order was completed on a total income at Rs 1.20,070'- inclusive of Rs. 90.411 -and Rs 31.659/being unrecorded as well as income from undisclosed sources respectively. The aforesaid addition was confirmed by the C.I.T.(Appeals) Tribunal, however, in Second Appeal deleted the addition of Rs. 31.659 - and has confirmed the addition of Rs. 90,411/-. Assessing Authority levied penalty under Section 271(1) (c) at Rs. 58.944/- being minimum penalty imposable. C.I.T (Appeals.) allowed the appeal in part and deleted the penalty leviable on the amount of Rs. 31.659/- which was deleted by the Tribunal but has sustained the penalty at Rs. 37,320/- on the amount of Rs. 90,411/- treating it as a concealed income. Assessee filed appeal before the Tribunal. Tribunal allowed the appeal and deleted the entire penalty. Tribunal held as follows:

(3.) Heard Sri A. N. Mahajan, learned Standing Counsel appearing on behalf of Revenue. No one appears on behalf of assessee.