COMMISSIONER OF INCOME TAX Vs. DHARAMCHAND L SHAH

JUDGEMENT

(1.) IN this reference the Revenue is challenging the action of the Tribunal in cancelling the penalty imposed under S. 271(1)(c) of the IT Act, 1961 (the Act). The respondent (hereinafter referred to as the 'assessee') is an individual. The assessment year is 1971 72 and the relevant previous year is the financial year ended on 31st March, 1970 in respect of the item with which we are concerned in this Reference.

(2.) THE facts, in brief, are that on 18th June, 1970 the assessee along with an accomplice, was apprehended by Customs authorities and gold biscuits with foreign markings weighing 400 Tolas were found on his person. When interrogated by the Customs authorities, the assessee admitted that the said gold belonged to him. In the course of the income tax assessment proceedings, however, the assessee resiled from his earlier stand and contended that he was not the owner of the gold. The ITO rejected this contention and treated a sum of Rs. 84,000, being the market value of the gold at the material time, as the assessee's income from undisclosed sources, by invoking the provisions of S. 69A of the Act.

(3.) THE assessee had accepted the order of the AAC. However, the Revenue went up in appeal before the Tribunal and contended that the gold biscuits should have been valued at the market price prevailing in India and not at the international price, as held by the AAC. The Tribunal accepted the stand taken by the Department and reversed the decision of the AAC, thereby restored the original addition of Rs. 84,000 made by the ITO.