TaxTMI 
TaxTMI 
1979 (4) TMI 43
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.... and general merchants. For the asst. yrs. 1970-71 and 1971-72, the assessee-firm having filed the returns of income, the original assessments were completed by the ITO on income of Rs. 18,184 and Rs. 20,636 for the respective assessment years. 3. There was a search on 21st Nov., 1972 conducted by the IT Department on the business premises of the assessee-firm, and in course of the search some books of account and documents were seized and among the documents seized were one Roker Bahi of Kanhaiyalal & Co., one Bikri Bahi of Kanhaiyalal & Co. and one ledger marked `KL'. The ITO started investigations into the affairs oft the assessee-firm vis-a-vis original assessments and during these investigations the ITO examined one Shri S.C. Jain a....
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....had been destroyed but at the time of hearing the assessee-firm filed trading accounts, profit & loss accounts and balance-sheet of Kanhaiyalal & Co. to the ITO for the respective assessment years and as per those statements, income for the asst. yr. 1970-71 was Rs. 3,986 and for the asst. yr. 1971-72 the income was Rs. 9,906 respectively. In the reassessments made by the ITO, income of the assessee was computed for the two years as under: Asst. year 1970-71: . . "Total income as per original assessment: . Rs. 18,184 Income from M/s Kanhaiyalal & Co. . . Net profit Rs. 3,986 . Add: . . Introduction of opening capital of Rs. 500 deposited in the Bank on 22-1-70 is added back in absence of evide....
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....firm argued before the AAC that since the income in dispute was shown in the returns filed by the assessee-firm in response to notice under s. 148 and that since the assessee-firm extended full co-operation to the Department the penalties should be restricted to the minimum amount of income sought to be concealed The AAC found favour with the arguments of the learned counsel for the assessee and held that penalties for both the years be restricted to the minimum, i.e. at 100 per cent of the incomes sought to be concealed in respect of the business, Kanhaiyalal & Co., which amounted to Rs. 3,986 and Rs. 11,306 for the asst. yr. 1970-71 and 1971-72 respectively. Against these orders of the AAC the assessee-firm has come in the present appeals....
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....idered the facts very carefully and have gone through the rival submissions of the parties, and from the above statement of facts the following facts emerge undisputed:— (i) That the assessee was being regularly assessed and assessments for the years under appeal have been completed and in the said returns of income filed by the assessee, the assessee had not shown any income from the business Kanhaiyalal & Co.; (ii) That the IT Department having laid its hands on evidence and documents incriminating to the assessee, examined the partner of the assessee and also the person alleged to be the owner of the business Kanhaiyalal & Co. and both these gentlemen had been categorical in their assertions that the income of the business was in....