COMMISSIONER OF INCOME TAX ANDHRA PRADESH Vs. CHANDULAL

JUDGEMENT

(1.) The Income-tax Appellate Tribunal has refer the following question of law for the opinion of this court under s. 256(1) - of the I.T. Act, 1961 :

(2.) The matter relates to the income-tax assessment year 1968-69. The assessee filed a return declaring income of Rs. 2,321 from business. During the course of investigation, the ITO found that, in the previous year relevant to the assessment year 1968-69, the assessee advanced loans to five individuals aggregating to Rs. 6,900. These loans were not recorded in the assessees book of account. The ITO observed that the peak amount of the loans advanced to the five individuals was Rs, 3,200 in as much as there were some repayments by the individuals and fresh advances. The ITO also found that a sum of Rs. 5,000 advanced to one Shri Miraz Ali Khan on Augu 10/08/1967, was also not entered in the assessees books of account. The ITO further found that a sum of Rs. 1,000 received from Smt. Jamalunnisa Begun by way of commission was also not accounted in the books. Thus, the ITO found that money-lending loans to the extent of Rs. 8,200 were not entered in the assessees accounts apart from a sum of Rs. 1,000 received by way of commission from Smt. Jamalunnisa Begum. The ITO included the sum of Rs. 9,200 in the assessees total income for the assessment year 1968-69. The assessee carried the matter in appeal, but the assessment was confirmed and the matter became final.

(3.) Before the completion of the assessment proceedings, the ITO initiated proceedings for the levy of penalty for concealment of income or for furnishing inaccurate particulars of such income under s. 271(1)(c) of the I.T. Act, 1961. The assessee explained that the money-lending advances of Rs. 8,200 referred to above were made from out of the assessees winnings in card games. It does not appear that any specific explanation was offered in respect of the sum of Rs. 1,000 received from Smt. Jamalunnisa Begum by way of commission. The ITO declined to accept the assessees explanation that the money-lending advances of Rs. 8,200 were made from out of the assessees winnings from card games. Accordingly, the ITO levied Rs. 9,200 under s. 271(1)(c) which is equivalent to the amount of income considered to have been concealed by the assessee.