1971 (3) TMI 2

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....evi and Smt. Devi, wives of two members of the family. The assessee explained that the amounts proceeded out of the sale of ornaments for an amount of Rs. 25,168, and supported the explanation by Parchas issued by one Banwari Lal Saraf of Delhi on September 27, 1950. Those Parchas and the affidavit of Banwari Lal were filed by the assessee. The Income-tax Officer, however, did not accept the explanation of the assessee and treated the sum of Rs. 25,168 as the assessee's income from undisclosed sources. The finding was upheld in appeal by the Appellate Assistant Commissioner and, thereafter, in second appeal, by the Income-tax Appellate Tribunal. The Tribunal observed that it was not satisfied with the explanation rendered by the assessee, a....

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....in law ? " The Tribunal has found that it was not justified, and it has found so on its appraisal of the material on the record. Learned counsel for the Commissioner points out that a number of circumstances have been referred to by the Inspecting Assistant Commissioner in the penalty order. It is said that an enquiry was made by the Income-tax Officer, Delhi, in regard to Banwari Lal and Banwari Lal had refused to produce his account books and was also reported to be notorious for making fictitious entries in his account books. So far as that is concerned it may be that Banwari Lal is not a reliable person, but that does not necessarily lead to the conclusion that the case of the assessee is false. It was for the Tribunal to consider as....

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....gs under section 28 of the Act of 1922 were of a penal nature and the burden was on the department to prove that the particular amount was a revenue receipt and, therefore, in the nature of income, that it would have been perfectly legitimate to say that the mere fact that the explanation of the assessee was false does not necessarily give rise to the inference that the disputed amount represents income. The finding given in the assessment proceedings could not be said to be conclusive although it might constitute good evidence. Before penalty could be imposed, the Supreme Court added, the entirety of circumstances must reasonably point to the conclusion that the disputed amount represented income and that the assessee had consciously conce....