TaxTMI 
TaxTMI 
1978 (4) TMI 109
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.... the basis of net profit of Rs. 7,021 shown at the foot of the "trading & profit & loss account". A copy of the said trading and profit & loss account and the corresponding balance-sheet and the statement showing how the income was determined at Rs. 5,803 was filed together with the return. It was indicated that a firm of Chartered Accountants, Kapadia & Malbari, had prepared the trading & profit & loss account and balance-sheet. The date placed on the said accounts was 30th April, 1969. The trading and profit and loss account disclosed sales of Rs. 2,52,946, purchases of Rs. 1,63,980 and a net profit of Rs. 7,021. The balance-sheet showed that the net profit had been transferred and adjusted to the credit of the assessee's capi....
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....ts and liabilities sides agreed and there was no difference in the balance sheet. 6. The AAC. noticing that the net profit now disclosed as per the above mentioned accounts was more that the net profit considered earlier at the assessment stage, set aside the assessments and restored the matter to the file of the ITO for making a fresh assessment. 7. In the course of the fresh assessment proceedings the assessee relied upon the profit & loss account and balance-sheet which had been produced before the AAC. for the first time and which may be described for the sake of convenience as the second set of accounts. The ITO made the fresh assessment on the footing that the net profit shown as per the books was Rs. 13,491 and determined total....
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....d with the ITO. Further observing that only minimum penalty had been imposed by the ITO having regard to the cooperation received from the side of the assessee, the AAC did not reduce the penalty. 11. Aggrieved by the decision of the AAC, the assessee has filed the appeal now under consideration. Shri Mehta, learned counsel for the assessee pleaded that the penalty may be cancelled and in the alternative that it may be reduced. He emphasised that the conduct of the assessee may be taken into account. His point was that it is significant that it was the assessee who brought to the notice of the departmental authorities the second set of accounts and it may be accepted that it is a case of a bonafide mistake and not a case of conceal....
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.... to offer. The third points is that the net profit was shown in the first set at only about Rs. 7,000 when the year's profit was about Rs. 13,500, i.e. almost twice as much. It is difficult to accept that a businessman did not to have even a suspicion that there may be something wrong with the accounts when they showed profits which were grossly under stated. 13. It is well settled that only because an assessee may at a later stage accept or even himself bring to the notice of the departmental authorities that his Income was much more than the income declared by him in the return earlier, he is not absolved from the guilt, if any, arising from concealment of ITO or furnishing inaccurate particulars of income in the return filed earlier. ....