COMMISSIONER OF INCOME TAX Vs. LUNIDARAM TULSIDAS PANJABI

JUDGEMENT

(1.) BY this reference under section 256(1) of the Income -tax Act, 1961 ('the Act'), the Income -tax Appellate Tribunal ('the Tribunal'), at the instance of the Revenue, has referred the following question of law to this court for opinion :

(2.) THIS reference relates to two assessment years, viz., 1971 -72 and 1972 -73. The controversy, as is evident from the question itself, relates to the levy of penalty, under section 271(1)(c) of the Act. The material fact of the case, briefly stated, are as follows : The assessee, who is an individual, carried on powerloom cloth business and was also a partner in three firms dealing in cloth and building construction. In the course of assessment proceedings for the assessment years 1971 -72 and 1972 -73, it was revealed that the assessee had received a sum of Rs. 54,890 as jackpot winnings from the Royal Western India Turf Club (RWITC) during the previous year ending on March 31, 1971, and similar jackpot winnings of Rs. 63,386 during the previous year ending on March 31, 1972. In this connection, the assessee produced RWITC vouchers showing the following receipts :

(3.) SHRI . N. M. Virwani was also examined by the Income -tax Officer who stated in his deposition that he was a life member of the Turf Club and that he had been going to the races for more than 20 years and that he was still attending the races regularly. Shri Virwani owned a race hose and stated that he used to give some tips to the assessee whenever asked.