TaxTMI 
TaxTMI 
1996 (5) TMI 103
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....f income when the assessee has failed to substantiate discrepancies in accounts even before Tribunal?" 2. Since, in our opinion, no referable question of law arises, we decline to make a reference. 3. The assessee-company derived income from the manufacture and sale of agricultural implements. Assessment was made under s. 143(3) of the Act on 4th Sept., 1982, on a total income of Rs. 1,91,982. The AO noticed that the assessee had made fictitious purchases and sales and had also shown lower GP rate in this year as compared to the earlier years. Certain commission paid to agents was found to be fictitious. The AO after noticing various discrepancies, proceeded to determine the profit adopting the rate of 43% on total sales of Rs. 11,50,00....
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....0 and Rs. 2,52,799 respectively were entirely fictitious. According to the Tribunal, there was only a suspicion that purchases had been inflated and sales understated. The Tribunal further observed that it was for that reason of suspicion that the additions were not made on the basis of those figures but, instead, the method of determining profit was adopted by applying a higher GP rate. As regards the difference in the account of PTL, the Tribunal accepted the contention of the learned counsel for the assessee that it had occurred on account of method of accounting. The assessee had recorded the supplies in stock register as and when stock was received. The suppliers had, however, issued debit notes as and when it found it appropriate. Acc....
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.... treated as insufficient by the Revenue authorities. According to the Tribunal, once the assessee had given a bona fide and plausible explanation, it was for the Revenue to establish that the assessee was guilty of concealment of particulars of income. 7. On the basis of the above facts and discussion, the Tribunal held that the charge of concealment had not been made out and, therefore, the levy of penalty could not be sustained. Penalty was accordingly deleted. 8. At the time of hearing of the reference application, the learned Departmental Representative submitted that the Revenue authorities had pointed out serious discrepancies in the maintenance of books of accounts and the Tribunal had also taken cognizance of the same but it sti....
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....oncealment of income, such a finding being a finding of fact did not give rise to a question of law. Reliance was also placed on Madras High Court decision in CIT vs. V. Ponnuswammy Naidu (1995) 214 ITR 185 (Mad) for the proposition that where the finding of the Tribunal cancelling the penalty for concealment of income was based on facts on record, such a finding did not give rise to a question of law. For a similar proposition, reliance was also placed on the Calcutta High Court decision in CIT vs. Shankar Ghosh (1995) 214 ITR 349 (Cal) wherein it was held that the question whether there was any concealment of income was purely a question of fact. The learned counsel for the assessee also relied on the Allahabad High Court decision in Addl....