1980 (11) TMI 80

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....ssee in this appeal centre round penalty of Rs. 3,900 imposed by the ITO and upheld in appeal by the ld. AAC. 2. While examining the books of account for the year ending31st March 1975ITO found that the purchases had been inflated by the assessee to the extent of Rs. 3,900. One of the items of purchase of cloth at Rs. 2,657.20 from M/s. Darshan Lal Devinder Kumar of Ahmedabad was accounted for ....

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....e of Rs. 3,950 in the account of one Shri Duni Chand Manohar Lal was not accounted for with the result that the inflation in the purchases was covered by this other omission. The balance-sheet so prepared showed difference of Rs. 56.45 only. When the mistake came to the notice of the assessee in the course of the assessment proceedings, attempt was made to locate the discrepancy and the assessee p....

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....ee and the penalty levying authority has to establish that the assessee had consciously and deliberately suppressed the income in order to defraud the Revenue. In the present case undoubtedly inflation interest in the purchases to the extent of Rs. 3,900 was there and if a conclusion could be reached that the inflation was done with intention to defraud the Revenue, certainly penalty under s. 271(....