KAMALCHAND SURANA Vs. ITO

JUDGEMENT

(1.) These two penalty appeals relate to the same assessee but for different assessment years 1992-93 and 1991-92. So, they are being disposed of by this common order for the sake of convenience.

(2.) The brief facts of both the cases are almost identical. The assessee is a Development Officer in LIC. During the years under consideration, the assessee worked as an agent upto 4-7-1991. During assessment years 1991-92 and 1992-93 he earned commission from LIC of India of Rs. 1,49,210 and Rs. 1,77,442, respectively. Accordingly, returns declaring income of Rs. 35,510 and Rs. 45,440 were filed on 29-6-1992 and 6-7-1992, respectively, after claiming expenditure of Rs. 1,13,698 and Rs. 1,49,211 under various heads on estimate basis motioned in income and expenditure account. A survey was carried out at the residence-cum-office of the appellant on 26-8-1992, during which statement of the assessee was recorded in which the assessee denied the maintenance of any books of accounts and vouchers relating to expenses claimed under various heads. While completing the assessment, the learned assessing officer disallowed expenditure under various heads to the extent of Rs. 55,149 and Rs. 58,237 for the assessment year 1991-92 and 1992-93, respectively, on the basis of this statement treating the same to be bogus. The learned Commissioner (Appeals) dismissed the appeals filed by the learned Commissioner (Appeals) (sic-assessee). On further appeal, the Tribunal estimated the income of assessee for both the years after applying the NP rate of 40 per cent of total commission receipts. Penalty was levied under section 271 for Rs. 50,000 and Rs. 50,000, respectively, and the learned Commissioner (Appeals) reduced the penalty to minimum, i.e., Rs. 21,667 to Rs. 31,566, respectively.

(3.) The learned Authorised representative, Shri Mahendra Gargieya, submitted that the statement recorded during the survey on 26-8-1992, which has been made the basis for making disallowance of various expenses claimed suffers from serious infirmity since it is not ascertainable from this statement as to who recorded it and in what capacity and under whose authority. Apparently, it was not recorded by the assessing officer and such an evidence cannot be used against the assessee. Hence, the levy of penalty for concealment of income and furnishing of inaccurate particulars on the basis of such a statement is just illegal and against the provisions of law. He has relied on the case of Kamal, Co. 21 Tax World 427 (Jd).