1981 (12) TMI 1

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.... return of income for the assessment year 1964-65. While the assessment proceedings were pending, the assessee filed with the Commissioner of Income-tax a petition under section 271(4A) of the Act under which it offered for assessment the peak credit in the accounts in which it had disclosed its borrowings from certain multani bankers. The peak credit worked out to Rs. 3,25,000. The assessee submitted that these loans from multani bankers were repaid during subsequent years. While reiterating that the hundi borrowings were genuine, it expressed surprise that the hundi bankers should have made statements before the Department that the hundis were only accommodation transactions. The assessee, nevertheless, offered the amount of Rs. 3,25,000 ....

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....alty of Rs. 23,686. On appeal, the Tribunal accepted the contention of the assessee that its offer during the assessment proceedings to get taxed on the peak credit was only to buy peace with the Department and not on the basis of any admission that the hundi loans were not genuine. The Tribunal, held that the addition made on account of the unproved hundi loans, on an agreed basis, cannot be a ground for holding that the assessee was guilty of concealment of income. It, accordingly, cancelled the penalty levied by the Inspecting Assistant Commissioner. The Department's contention before us is based on the question of law which we have earlier set out. The contention is that the assessee's offer for assessment must itself be regarded as su....

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....ame proceedings, the assessee, for its part, had asked for a reference on the following questions of law : "l. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in rejecting the contention of the assessee that the Inspecting Assistant Commissioner did not have any jurisdiction to levy the penalty after having dropped the penalty proceedings initiated originally ? 2. Whether, on the facts, and in the circumstances of the case, the Tribunal was right in holding that the penalty was levied by the Inspecting Assistant Commissioner for concealment of income and not for furnishing inaccurate particulars of income ? 3. If the answer to question No. 2 is in the negative, whether the Inspecting Assistant Commiss....