1976 (12) TMI 42

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....e assessment year 1957-58 is sound in law?" The Tribunal rejected this contention saying that it is a question of fact. It rejected the revenue's contention on a consideration of all the facts and circumstances of the case. It is against this refusal that I.T.C. No. 194 of 1976 is filed. I.T.C. No. 193 of 1976 raises the consequential question: "Whether, on the facts and in the circumstances of the case, the order of the Tribunal cancelling the penalty levied under section 271(1)(c) by the Inspecting Assistant Commissioner in the assessment year 1957-58 is sound in law?" The question arose in the following manner. The assessee claimed certain credits for the year 1957-58 and, on an assessment, the Income-tax Officer accepted the....

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.... given credit to the assessee had stated that they were only "havala" transactions. On mere receipt of this letter, the Income-tax Officer, Nellore, proposed to reassess and started those proceedings. The Tribunal found that actually the statements made by the two persons were not brought on record. It was also pointed out that the Tribunal wanted those statements to be produced but the department was not able to produce them. It was not known that the two persons categorically stated that they had not lent any money to the assessee. There was nothing to indicate that the two hundi creditors had denied having lent monies to the assessee specifically. The Tribunal further pointed out that there was no use relying on what the Bombay officer i....