Commissioner of Income Tax vs B.M.S. Engg.

Suhas Chandra Sen, J.—The following two questions of law have been referred to by the Tribunal u/s 256(1) of the income tax Act, 1961:

Whether, on the facts and in the circumstances of the case, and having regard to the fact that the Tribunal found that the expenditure of Rs. 18,120 only claimed by the assessee was not established to have been incurred by the assessee, the Tribunal misdirected itself in law in holding that the said sum of Rs. 18,120 should be reduced from the total income of the assessee for the purpose of applying the Explanation to section 271(1)(c) of the income tax Act, 1961?

If the answer to question No. 1 is in the affirmative, then whether on the facts and in the circumstances of the case the Tribunal was correct in holding that the Explanation to section 271(1)(c) of the income tax Act, 1961 had no application to the facts of the case and in that view rejecting the miscellaneous application filed by the department?

This assessment year involved is 1966-67 for which the year of account is calendar year 1965. This is a case of penalty. Where there is a question of concealment, it is basically a question of fact and the quantum of assets is a question of fact.

This that view of the matter, since no question of perversity has been raised, the first question is answered in the negative and in favour of the assessee. The second question depends on the answer to the first question being in the negative. Since we hold the first question is in the negative, we decline to answer the second question. There will be no order as to costs.

Banerjee, J.

I agree