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Income Tax Reference No. 289 of 1969, decided on 19th April, 1982.

Income‑tax Act (XI of 1922)‑

‑‑ S. 28(1)(c)‑Penalty‑Concealment of income‑Addition made to total income and further penalty levied for concealment of income‑Cancellation of penalty by Tribunal for reasons that though addition was justified yet there was no evidence of concealment of income‑Finding neither perverse nor , based on no material‑Valid in law.

Ajit Sengupta with Sunit Mukherjee for the Commissioner.

Nemo for the Assessee.

‑In this reference under section 66(2) of the Indian I.T. Act, 1922, as directed by this court, the following question has seen referred to us :

"In the facts and circumstances of the case, was the Tribunal justified in drawing the inference that no concealment was established in respect of the sum of Rs. 1,73,678 and that no penalty was justified "

It appears that this reference relates to the assessment orders for the assessment year 1948‑49 and is arising out of the penalty under section 28(I)(c) of the Indian I..T: Act, 1922. The assessee is a company and it was carrying on business in the manufacture of jute goods. During the relevant previous year it purchased a substantial quantity of jute at its Bhairab agency The I.T.O. found that the average purchase rate at such agency was Rs. 30.5 annas per maund as against the average market price of Ra. 29‑7‑3 pries per maund. In proof of the purchases the assessee produced only a register that was maintained at Bhairab, but bill and voucher were not produced. The I. T. O. held that the assessee had inflated the purchases of jute at Bhairab and for such inflation he added a sum of Rs. 1,73,678 in the assessment. The A.A.C., on appeal, deleted the addition. But this was restored by the Tribunal in second appeal. Holding that the assessee had deliberately inflated the purchases of raw jute at Bhairab Agency in order Produce its tax liability and that the assessee had concealed the particulars of its income or deliberately furnished inaccurate particulars of its income, the I. T‑ O. imposed a penalty of Rs. 70,000 under section 28(1)(e) of Indian I.T. Act, 1922.

The assessee thereafter appealed to the A.A.C. The A.A.C. observed that was possible for a person to conceal the particulars of his income and deliberately furnish inaccurate particulars thereof by suppressing evidence that as in his possession and could be produced and also by maintaining a so-called record of purchases which was merely a compilation enabling him to claim a higher amount towards purchase price than the amount actu ally paid by him and he upheld the order of penalty imposed by the I.T.O.

The assessee thereafter went up to the Tribunal and the Tribunal held that merely because the average price for purchases of jute shown by the assessee was more than that shown by the some other assessees, it would not lead to a conclusion that the assessee had in fact shown a higher value for the purpose of purchase than the actual amount that the assessee had to incure. The Tribunal held that although there was justification in making an addition in the assessment, it could not be held, as a matter of f that the assessee concealed the particulars of its income or deliberate) furnished inaccurate particulars thereof. The Tribunal, therefore, cam to the conclusion that no concealment was established and that the penalty was unjustified.

It appears that there was evidence before the Tribunal and the Tribunal considered all aspects of the matter and came to the conclusion, which in our opinion has not been challenged either to be perverse or as base on no material. We are also of the opinion that the findings of the Tribunal were not perverse and were not based on material.

That being the position the question referred to us must be answered in the affirmative in favour of the assessed.

There will, however, be no order as to costs.

SUHAS CHANDRA SBN, J.‑I agree.

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