TaxTMI 
TaxTMI 
1978 (1) TMI 66
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....being the year ending on the 13th April, 1962. The assessee had filed a return showing an income of Rs. 1,490. While examining the accounts the Income-tax Officer noticed a number of cash credits which were stated to be loans taken against hundis. At the close of the accounting year a total sum of Rs. 40,000 was shown outstanding from five persons. The Income-tax Officer called upon the assessee to prove these cash credits and also served notices under section 131 on the alleged creditors. Only two of them appeared before the Income-tax Officer and gave evidence. The Income-tax Officer did not accept that the said two persons were money-lenders and held that they were merely name-lenders. Accordingly, the Income-tax Officer treated the s....
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.... Tribunal from the orders of the Appellate Assistant Commissioner as also from the order of the Inspecting Assistant Commissioner imposing penalty. In the appeal from the order of assessment, the Tribunal held that the addition of Rs. 40,000 was justified. In respect of the appeal against the order of penalty the Tribunal followed the decision of this High Court in the case of Anwar Ali [1967] 65 ITR 95 (Cal) and held that mere addition to the income of the assessee was not sufficient to sustain the order of penalty and the onus was on the revenue to show that the assessee had concealed or had deliberately furnished inaccurate particulars of his income. In the appeal against the order passed under section 104 of the Income-tax Act, 19....
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....enalty in respect of the above addition could not be sustained on the ground that the department had not proved that the assessee had concealed particulars of its income or deliberately furnished inaccurate particulars of its income ? 2. Whether, on the facts and in the circumstances of the case and having held that the sum of Rs. 40,000 represented the assessee's income from undisclosed sources in the assessment appeal, the Tribunal was right in holding that, for purposes of section 104, this addition should be ignored and that proceedings under that section were not, therefore, justified ? " So far as the question No. 1 is concerned, it appears to us that the matter in dispute is covered by various decisions of the Supreme Court, in....
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....ax v. Gangadhar Banerjee & Co. (Pvt.) Ltd. [1965] 57 ITR 176, the Supreme Court has clearly laid down the law as follows: " Though the object of the section is to prevent evasion of tax, the provision must be worked not from the standpoint of the tax collector but from that of a businessman. The yardstick is that of a prudent businessman. The reasonableness or unreasonableness of the amount distributed as dividends is judged by business considerations, such as the previous losses, the present profits, the availability of surplus money and the reasonable requirements of the future and similar others. The Income-tax Officer must take an overall picture of the financial position of the business. He should put himself in the position of a pr....