1988 (6) TMI 26

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....r of Income-tax, the following questions of law have been referred to this court under section 256(2) of the Income-tax Act, 1961, for the assessment year 1974-75 : "1. Whether, on the facts and in the circumstances of the case, the Tribunal is right in holding that the penalty order passed by the Inspecting Assistant Commissioner cannot be sustained on the sole ground that the Tribunal has del....

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....reimbursed Madaripur Trading Co. Ltd. on October 30, 1950, in the following manner : "Rs. 4 lakhs were sent to one Shri Shaligram Chowdhury of Bombay by telegraphic transfer on October 30, 1950 through Hindusthan Mercantile Bank. The said Shaligram Chowdhury, in his turn, paid over Rs. 4 lakhs to G. Yafi & Sons of Bombay which, in turn, paid the said amount to Madaripur Trading Co. Ltd. in cash." ....

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....ent order dated September 25, 1969, the Income-tax Officer rejected the assessee's explanation regarding the mode of payment of Rs. 4 lakhs to Madaripur Trading Co. Ltd. and, accordingly, he treated Rs. 4 lakhs as the assessee's income from undisclosed sources. Simultaneously, he initiated proceedings under section 271 ( 1 ) (c) of the Act and referred the matter to the Inspecting Assistant Commis....

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....of Rs. 4 lakhs on October 30, 1950, which was accounted for by the assessee in its books of account and not two transactions as alleged by the Revenue. The Tribunal, therefore, deleted the addition of Rs. 4 lakhs made by the Income-tax Officer as the assessee's income from undisclosed sources. As the Inspecting Assistant Commissioner had imposed a penalty of Rs. 4,50,000 under section 271(1)(c)....