1980 (4) TMI 162

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....appeal by the assessee in respect of asst. yr. 1974-75. The assessee is a firm. For the previous year relevant to the asst. yr. 1974-75 return was filed declaring income of Rs. 4,425. Income was finally assessed at Rs. 23,426. The ITO during the course of assessment proceedings was of the view that there was concealment of income to the extent of Rs. 21,524. So at the time of completing the assessment he initiated penalty proceedings under s. 271(1)(c) of the Act. 2. In penalty proceedings the assessee filed written reply on 23rd Dec., 1976 which was received on 31st Dec., 1976. Inter alia it was contended that there was no concealment of income by the assessee. The income was assessed at higher figure after disallowing certain expenses.....

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....iled without any detection by the Department. Under the circumstances in respect of this item also there was no concealment of income by the assessee. It was also contended that the learned AAC in para 8 of his order stated that there was rental income of Rs. 3,000 from bank and the same was not disclosed by the assessee. It was contended that the ITO never held that there was concealment of income of Rs. 3,000. The ITO never initiated penalty proceedings in respect of this item. As a matter of fact the ITO was of the view that there was income from rent amounting to Rs. 2,772 and the same was concealed by the assessee. According to the learned counsel this observation of the ITO was not correct. The assessee had disclosed the rent in the b....

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....r of fact, one of the partners of the assessee firm filed an affidavit before the AAC, a copy of which is in the paper book. In the affidavit it was stated that there was totalling mistake of Rs. 5,000. In the affidavit it was also contended that the Munim who made the totals was not well-versed with the accountancy work. The said affidavit remained uncontroverted. Looking to the aforesaid facts and the evidence on record, no penalty could be imposed for alleged inflation of cash balance of Rs. 5,000. 6. The next time for imposing the penalty was regarding non-disclosure of capital gains. According to the assessment order there was capital gain of Rs. 10,725. The AAC held that capital gain was only to the extent of Rs. 3,900. As a matter....