1978 (7) TMI 38

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....ough the accounts relevant for the material assessment, namely, assessment year 1956-57, the ITO found that on June 25, 1955, the assessee had a stock of 8,189 lbs. of yarn valued at Rs. 72,919-10-0 in the Ludhiana branch. This was as per the stock book of that branch. The ITO, it appears, had obtained information that on the same date, viz., June 25, 1955, the assessee had pledged 76 bales of yarn valued at Rs. 1,28,175 with the Ludhiana branch of the Punjab National Bank for securing an overdraft. This information was obtained from the bank. According to the ITO, each bale of mill-packed yarn consisted of 200 lbs. of yarn. From the stock book of the assessee, the ITO inferred that the assessee could have had only 33 bales of yarn of its o....

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.... prove satisfactorily the exact arrangement with the bank and a broad view of the matter. In view of the concealment of particulars of income to the extent of Rs. 12,500, the penalty proceedings were adopted and the I.T. authorities levied a penalty Rs. 8,750. The Tribunal, however, did not accept the view that any concealment within the meaning of  s. 28(1)(c) had been established. The Tribunal pointed out that the addition of Rs. 12,500 was made by assessing the income of the assessee, because the assessee-firm did not explain wherefrom it got the amount required for purchasing the excess stock. The Tribunal took the view that, so far as the question of imposing the penalty was concerned, the matter was liable to be decided in accor....