COMMISSIONER OF INCOME TAX Vs. MOTILAL AND CO

JUDGEMENT

(1.) The following question of law has been referred by the Tribunal under Section 256(1) of the Income-tax Act, 1961 ("the Act"):

(2.) The dispute relates to a penalty order. The assessee filed a return of income on September 17, 1966, showing business income of Rs. 12,096 only. Thereafter, it filed a disclosure petition before the Commissioner and claimed exemption from penalty under Section 271 (4A) of the Act The disclosure related to the assessment years 1959-60 to 1965-66 and covered a total amount of Rs. 1,20,000. It was accepted in the disclosure petition that the amount was introduced by the assessee in certain benami hundi loans in its books of account and that it represented its segregated profits from business. Before such disclosure came up for consideration, the Income-tax Officer took up the assessment for the assessment year 1964-65. It may by noted that the disclosure petition was later on rejected by the Commissioner.

(3.) The Income-tax Officer made enquiries about the genuineness of the four hundi loans which are mentioned hereinbelow : <FRM>JUDGEMENT_288_ITR184_1990Html1.htm</FRM>