TaxTMI 
TaxTMI 
1987 (7) TMI 572
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....r made by the Income Tax Officer in so far as the additions of the above amounts in appeal or otherwise. It was the case of the assessee that it did not appeal because it wanted to keep good relations with the revenue although, according to the assessee the above additions made by the Income Tax Officer were totally unjustified and illegal. 3.  On 14th March, 1963 the Income Tax Officer issued a notice under Section 274 read with Section 271 of the Income Tax Act, 1961 (hereinafter called 'the Act') in respect of the assessment year 1958-59 for imposing penalty. 4.  The assessee company duly demurred. After considering the reply the Inspecting Assistant Commissioner on 1st October, 1964 imposed a penalty of Rs. 70,000/- under Section 274 read with Section 271 of the Act holding inter alia that there was concealment of income to the tune of Rs. 1,37,700/- and the maximum penalty of Rs. 1,06,317/- was imposable in law but a sum of Rs. 70,000/- was imposed as penalty considering the facts and circumstances of the case. 5.  The assessee preferred an appeal against the said order. The Tribunal after considering the entire matter, reduced the penalty to Rs. 5,000/....
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....e answer given to this question and the appeal must be confined to the correctness of the answer given to the third question as reframed. 8.  The Income Tax Officer in his assessment order out of which this penalty proceeding arose noted that there were several disallowances in various accounts and he mentioned altogether 19 items totaling Rs. 3,01,787/-. All these were on account of disallowances. Main item was shortage in cane and. the amount was Rs. 67,500/-. Another item was salary of out-station staff and the amount was Rs. 21,700/-. There was also addition of Rs. 48,500/- on account of inflation in the price of sugar cane. 9.  The Inspecting. Assistant Commissioner in his order noted, inter alia three items, namely, (i) inflation in price of sugar cane Rs. 48,500/-; (ii) excess shortage claimed for cane Rs. 67,500/- and (iii) salary of out-station staff of loading contractors Rs. 21,700/-. It was found so far as this item is concerned that the amount was disallowed being a false debit. It was found that the assessee attempted to understate the income by debiting a false expenditure of Rs. 48,500/-. The Inspecting Assistant Commissioner noted that actual shorta....
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....penalty worked out to Rs. 1,06,371/-. Having regard to the facts and circumstances of the case, he imposed a penalty of Rs. 70,000/-. 10.  In appeal the Income Tax Tribunal was of the view that not much turned upon the fact that the assessee agreed to the additions of the amounts in the assessment. So far as the reliance placed upon Kanodia's statement by the Inspecting Assistant Commissioner was concerned, it had no relevance or bearing to the facts of the assessment year in question. He was not the contractor employed by the assessee in the year of account. He came in only for a later year. One Avinash Chand was the contractor in the year in question. He had specifically stated that he was responsible for shortages. He had also admitted that there was staff maintained by the mill at the centre at which he was the loading contractor. In fact he had gone to the extent of and stated as to what staff was maintained in that centre; there was a man in charge of the centre, a weighment clerk, a cane clerk and three to four chowkidars. He had also stated that they were not his employees. According to the Tribunal in these circumstances, the assessee could very well have argued ag....
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....High Court was not given. The High Court highlighted that so far as Rs. 67,500/- was concerned only on being faced with facts from which there could possibly be no escape from the inference that the amount represented his income, that the assessee agreed to its inclusion. The High Court was of the view that the Tribunal was in error in brushing aside consideration of these aspects while considering the question of concealment. 12.  In respect of the addition of Rs. 21,700/-, the Inspecting Assistant Commissioner had relied upon the statement of Kedar Nath Kanodia as also the fact that the assessee admitted that this item represented its income. The Tribunal did not place reliance upon the statement Kedar Nath Kanodia. It, however, omitted to take into account the fact of that the assessee had admitted that these items represented its income. The High Court was of the view that such admissions were made by the assessee but the Tribunal had not properly appreciated that aspect. Therefore, in respect of these two items the High Court was of the view that the Tribunal was not right in holding that the assessee was not guilty of any concealment. So far as question No. 2 wa....
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....the cumulative effect of all the facts in their setting as a whole. Where an ultimate finding on an issue was an inference to be drawn from the facts found, on the application of any principles of law, there would be a mixed question of law and fact, and the inference from the facts found was in such a case, a question of law. But where the final determination of the issue equally with the finding or ascertainment of the basic facts did not involve the application of any principle of law, an inference from the facts could not be regarded as one of law. The proposition that an inference from facts was one of law was, therefore, correct in its application to mixed questions of law and fact, but not to pure question of fact. In the case of pure questions of fact an inference from the facts was as much a question of fact as the evidence of the facts. In the instant case, there is a finding of fact and unless it could be said that all the relevant facts had not been considered in a proper light, no question of law arises. In our opinion, the Tribunal took into account all the relevant facts. The Tribunal had been accused by the High Court of not taking into consideration the fact tha....
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....ority to determine finally all questions of fact. The Tribunal must, in deciding an appeal, consider with due care all the material facts and record its findings on all contentions raised by the assessee and the Commissioner in the light of the evidence and the relevant law. The Tribunal was undoubtedly competent to disagree with the view of the Appellate Assistant Commissioner; but in proceeding to do so, it had to act judicially, i.e. to consider all the evidence in favour of and against the assessee. An order recorded on a review of only a part of the evidence and ignoring the remaining evidence could not be regarded as conclusively determinative of the question of fact raised before the Tribunal. It is for the Income-tax authority to prove that a particular receipt is taxable. If, however, the receipt is accepted and certain amount is accepted as taxable, it could be added but it was not accepted by the assessee, however, that it had deliberately furnished inaccurate particulars or concealed any income. In our opinion, the Tribunal has properly considered all the evidence in the instant case. In Rameshwar Prasad Bagia v. Commissioner of Income-tax, U.P. (87 I.T.R. 421), this Co....