2005 (7) TMI 47

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....d after the search operation when loose papers recovered indicated unrecorded transactions and unrecorded unexplained investment?" The brief facts of the case are as follows: The assessee/opposite party (hereinafter referred to as "the assessee") was a partnership firm and was carrying on the business of purchase and sales of cloth and was also carrying on the business of money lending. The assessee filed a return of income on July 27, 1981, showing loss of Rs. 3,660 and thereafter, a search was conducted at the business premises on September 23,1981, and also residential premises of the partner of the firm under section 132 and during the course of search, certain loose purchase were found, in which, transactions relating to sales we....

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....quantum assessment the addition was sustained by the Tribunal, ingredients of section 271(1)(c) are not present in this case. The very fact that the assessee filed voluntary return disclosing profit on sales found on the loose papers showed the intention of the assessee and it establish the conduct of the assessee. This was specially so because even notice under section 148 has not been issued by the Department. There could be one hundred and one reasons for including the profit on sales found on the loose papers. There is also force in the contention that the loose papers have been recovered from the room of Shri Sita Ram who was neither a partner of the firm nor connected with the assessee. There was no query made regarding the loose pape....

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....return showing profit thereon. He further submitted that even the entire amount at Rs. 90,411 has not been shown as the income. He submitted that the Tribunal has wrongly recorded the finding that that the assessee filed voluntary return disclosing profit on sales found on the loose papers showed the intention of the assessee and it established the conduct of the assessee. He submitted that the Tribunal has deleted the penalty on an irrelevant consideration and recording wrong findings. We have perused the order of the Tribunal and the authorities below. In our opinion, the order of the Tribunal deleting the penalty is based on irrelevant consideration and on wrong facts. The findings of the Tribunal are perverse and without any basis. I....