1981 (4) TMI 150

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....ssessment years are consolidated for the sake of convenience and disposed of by a common order. 2. During the three years under appeals the following salaries to two employees of the assessee were debited to the Revenue account of the assessee. Name of the person 1973-74 1974-75 1975-76 . Rs. Rs. Rs. Sri Motilal 2,100 3,400 4,008 Sri Kanthilal 3,100 ....

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....ulated balances in respect of these salaries is equally a false claim of interest payment. 4. In a letter dt. 24th Jan., 1976 filed by the assessee before the ITO, Krishnagiri, during the assessment proceedings for the asst. yr. 1973-74, it was mentioned that S/Sri Motilal and Kanthilal were actually employed by the assessee. It was clarified that Shri Motilal was a distant relative of Mr. Mang....

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....sessee he was dining and staying with the partners. As such it was not necessary for him to draw his salary. The salary remained deposited with the firm on which Shri Motilal was getting interest. He clarified that he was a bachelor and one of the partners of the assessee-firm, Shri Mangilal is related to him. 6. During the course of hearing, it was argued by the appellant's counsel that these ....

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....w of the point is however settled that if the assessee has not been able to prove a certain item of expenditure, penalty cannot be imposed. For the imposition of penalty the standard of evidence required is much higher. A claim of expenditure has to be disproved to be relevant and cogent evidence and mean rea has to be established. - Hindustan Steel Ltd. vs. State of Orissa (1970) 25 STC 211; (197....