INDUS ENGINEERING CO Vs. ASSTT. CIT

JUDGEMENT

(1.) The petitioners have approached this Court against the order dated 18th Dec, 1992 in respect of the penalty imposed under Section 271(1)(c) of the Income Tax Act. We are concerned with the assessment year 1985-86. The assessee had filed return of income for 1985-86 on 1-10-1985 which was subsequently revised.

(2.) Action under Section 133A was conducted on 30-6-1987 at office and factory premises of assessee. The same was converted into search and seizure action. In the course of search and seizure action, apart from undisclosed stock, havala loans to the tune of Rs. 36,05,000 were admitted by the assessee. Out of these havala loans, the loans to the extent of Rs. 10,65,000 pertained to assessment year 1985-86 and, therefore, the same was taxed as income of assessment year 1985-86 along with interest claimed by the assessee on these loans.

(3.) Commissioner (Appeals) vide letter dated 19-12-1988 confirmed the addition on account of bogus loan and disallowed the interest. The order of Commissioner (Appeals) has been accepted by the assessee.