COMMISSIONER OF INCOME-TAX Vs. S.V. ENTERPRISE

JUDGEMENT

(1.) This application filed by the Revenue under Section 256(2) of the Income Tax Act, 1961, was admitted on April 15,1998, on the following questions of law.

(2.) The assessment year involved herein in the assessment year 1984-85.

(3.) The assessee was dealing in iron and steel articles and had effected sales to the sister concern amounting to Rs. 2,91,625. There was a search action initiated at the residential and business premises of the assessee on June 27, 1985, wherein admittedly no books were seized from the assessee. However, at the business premises of the sister concern of the assessee certain books were found wherein it was noticed that the assessee had made sales of iron and steel amounting to Rs. 2,91,625 to the sister concern. As the assessee could not furnish complete availability of funds, the assessee filed return of income on December 30, 1985, by offering to tax the said amount of Rs. 2,91,625. The Assessing Officer passed the assessment order accepting the return filed by the assessee and levied penalty under Section 271(1)(c) of the Act, by invoking Explanation 3 thereto.