TaxTMI 
TaxTMI 
1976 (5) TMI 32
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....rain from repeating them except to the bare extent necessary. The assessee is a gold-smith by profession. For the asst. yr. 1962-63 he filed a return showing an income of Rs. 4,565 comprising an income from property of Rs. 1,655 and an estimated income of Rs. 3,000 from the Sunari business. The ITO was of opinion that having regard to the low house-hold drawings and the financial status and investments of the assessee the income from "Sunari business/Daraha business and house property" should be taken at Rs. 10,000 as against Rs. 4,565 returned. 3. Besides the above, it was noticed by ITO that the assessee's two sons had invested a sum of Rs. 10,000 during the previous year which they explained as having been made out of gifts received from the assessee. The ITO was not satisfied that the assessee was in possession of such huge amounts as would permit him to make the gifts to his sons. In the assessment order he observed that the assessee had not been able to establish the genuineness of the gifts. However, since the assessee also stated that he had made such gifts to his sons, he made a precautionary assessment on the assessee on the sum of Rs. 20,000 as his income from undiscl....
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....hich the imposition of a penalty is justified. 5. After having given careful consideration to the orders of my learned brother and the arguments addressed in their judgments I have come to the conclusion that on the facts and circumstances of the present case, the imposition of a penalty by the IAC was not justified. A penalty under s. 271(1)(c) can be imposed if the ITO, in the course of proceedings before him, is satisfied that the assessee has concealed the particulars of his income or furnished inaccurate particulars of income. Sec. 274(2) however, casts a duty upon the ITO to determine the income in respect of which he alleges concealment of furnishing of inaccurate particulars. Even the learned Accountant Member who has decided the case in favour of the Revenue has accepted the position that there should be a finding in the order of the ITO regarding the quantum of income concealed. He has proceeded to consider the order of assessment and he has concluded that since the total income has been determined at Rs. 30,000 as against the returned income of Rs. 4,565 it should be taken that there is an implied finding by the ITO that the concealed income is more than Rs. 25,000. A....
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....under s. 271(1)(c) was only the sum of Rs. 20,000. This being so, in my opinion, the reference by the ITO to the IAC was incompetent. 6. In the above context, I may add that I also share the misgivings of the learned Judicial Member as to whether it can at all be said that in this case the ITO had even been satisfied that the sum of Rs. 20,000 represented the income of the assessee. The learned Judicial Member has extracted the observation in the assessment order He has pointed out that having regard to the assessee's previous history the ITO did not and could not believe that the assessee had Rs. 20,000 and that this had been gifted to the sons. The assessment made upon the assessee is only precautionary. The ITO also reserves the right to the Department to consider the investments in the hands of the sons or any other rightful hands. Though having regard to the stand taken by the assessee that the investments of the sums had been made out of moneys gifted by the father, the ITO added the sum of Rs. 1,20,000 in the assessment, it was not an addition without any qualifications or reservations. The ITO had his own doubts as to whether the version given by the assessee was correct....
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....is of these estimates that they have come to the conclusion that a part of the investments in the earlier year and the whole thereof in the current year remained unexplained. I agree with the learned Judicial Member that there is no difference in principle between the addition made in the asst. yr. 1959-60 and the addition made in the current year. The fact that for the earlier year only a part of the addition was sustained whereas in the year under appeal the whole of the addition has been sustained, would not in my opinion make any difference. If in the view of the Tribunal the addition made for the asst. yr. 1959-60 did not attract the provisions of s. 271(1)(c). I think that on the same basis it should be held that the addition made in the year currently under appeal does not also attract the provisions of s. 271(1)(c). As explained in the decision of the Gujarat High Court quoted by my learned Brothers (97 ITR 440), the Explanation to s. 271(1) only creates a rebuttable presumption. The fact that the returned income is less than 30 per cent of the assessed income warrants the drawing of an initial presumption but it is open to the assessee to rebut the same. The burden for reb....