COMMISSIONER OF INCOME TAX Vs. RAMKUMAR AGARWALLA

JUDGEMENT

(1.) In this reference under Section 256(1) of the I.T. Act 1961, the following questions of law have been referred to this court for the assessment year 1963-64 :

(2.) Whether, on the facts and in the circumstances of the case, the imposition of penalty by the Inspecting Assistant Commissioner under Section 271(1)(c) was legally justified ?"

(3.) On appeal against the quantum, the AAC accepted the cash credits as genuine excepting one standing in the name of Amba Prosad Jyoti Prosad for Rs. 35,294. The income was reduced to Rs. 3,82,956. The IAC imposed a penalty of Rs. 22,500 holding that the sum of Rs. 35,294 representing the alleged loan in the name of Amba Prosad Jyoti Prosad was the concealed income of the assessee and the assessee had introduced its own concealed income in the guise of fictitious loan and is thus guilty of concealing income and of furnishing inaccurate particulars thereof.