Income-tax penalty can rest on the same evidence as assessment where bogus transactions are established.

Penalty under income-tax law could be sustained on the same material used for assessment where the transactions were found to be bogus. The Court held that penalty does not require separate or additional evidence beyond that relied upon for assessment if the facts and circumstances justify both findings. On the record, the false and fictitious nature of the transactions provided ample basis for penalty, so the challenge to the penalty failed.

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Issues: Whether penalty under the Income-tax law could be sustained on the same material that formed the basis of the assessment, where the transactions were found to be bogus.

Analysis: The transactions were found by the authorities to be false and fictitious. The Court rejected the contention that penalty required some additional material over and above that relied upon for assessment. It held that the very same evidence may support both assessment and penalty, depending upon the facts and circumstances of the case, and that the record in the present matter furnished abundant evidence for penalty.

Conclusion: Penalty was validly leviable on the same material used for assessment, and the challenge to the penalty failed.

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