Concealment penalty fails where revenue cannot prove exclusive ownership or deliberate suppression of income

Penalty for concealment under section 28(1)(c) was unsustainable because the revenue failed to prove deliberate concealment or that the disputed house property and diamonds were the assessee's exclusive assets. The assessee supported the claim that the properties were joint family assets inherited from the father with affidavits from brothers and a partition deed, and the revenue did not dispute the joint family arrangement or the genuineness of the deed. Mere timing of the partition deed after assessment proceedings had begun did not by itself negate its evidentiary value. The penalty was therefore set aside.

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Issues: Whether the levy of penalty under section 28(1)(c) of the Income-tax Act, 1922, for alleged concealment of income was justified on the facts proved.

Analysis: The assessee explained the house property and diamonds as joint family properties inherited from the father and supported that case by affidavits of the brothers and a partition deed. The revenue did not dispute the existence of the joint family, did not challenge the genuineness of the partition deed, and produced no material to show that the assets were acquired from the assessee's exclusive funds. Mere timing of the partition deed after commencement of assessment proceedings did not by itself destroy its evidentiary value. The record did not establish deliberate concealment or that the disputed assets were the assessee's separate property.

Conclusion: The penalty was not sustainable and was set aside.

Final Conclusion: The question referred was answered against the revenue, and the assessee succeeded on the penalty issue.

Ratio Decidendi: Penalty for concealment cannot be upheld unless the revenue proves, on cogent material, that the disputed assets or income belonged to the assessee's exclusive source and that concealment was deliberate.

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