VARIETY HOSIERY MILLS Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE assessee is a registered firm and derives its income form the purchase and sale of hosiery goods and their export. Under the entitlement against exports, the assessee imported 33, 157 lbs. of wool tops out of which 12,322 lbs. were stated to have been sold to Asha Wool Trading Co. at the rate of Rs. 6,80 per lb. Asha Wool Trading Co. sold the same goods to British India Corporation at the rate of Rs. 13.70 per lb. The transaction with Asha Wool Trading Co. was found to be a sham transaction and at the level of the appeal before the Tribunal, an amount of Rs. 1,00,000 was added to the declared income of the assessee.

(2.) IN the penalty proceedings under s. 271(1)(c) IT Act, the IAC imposed a penalty of Rs. 88,022 which was, however, reduced by the Tribunal to Rs. 25,000 vide order dt. 15th Dec., 1975. Still dissatisfied the assessee moved an application for referring six questions of law arising out of the said order of the Tribunal. The arguments before us, however, were confined only to two of them which read as under :

(3.) AS regards the discharge of the onus by the assessee the Tribunal in the earlier part of the judgment after considering all the facts and circumstances recorded a clear finding that the assessee had failed to prove the genuineness of the firm Asha Wool Trading Co. and the sale made to it. It was on this finding that the imposition of the penalty entirely depended and the same being a pure finding of fact, we find no reason to differ with the Tribunal that no question of law arises from the order imposing the penalty which could be referred to this Court for opinion. This petition is accordingly dismissed.