ORDER
P. S. Kalsian, Accountant Member
1. All the three appeals filed by the assessee are disposed of by a common order as common question of law and facts are involved.
2. The Assessing Officer imposed penalty under section 271(1)(c) on concealment of income in assessment years 1986-87, 1987-88 and 1988-89. The penalty imposed by the Assessing Officer under section 271(1)(c) was confirmed by the CIT (Appeals). Aggrieved by the separate orders of the CIT(Appeals) dated 6th January, 1994, all the grounds have been taken by the assessee against the imposition of penalty under section 271(1)(c) for the assessment years 1986-87 to 1988-89.
3. The brief facts of the case are that the assessee is a partner in three firms as mentioned by the Assessing Officer in the order dated 28-9-1993. Apart from the share income, the assessee has been purchasing coconuts from agriculturists and supplying them to M/s. Mamaseth & Co., after charging a small margin of profit. For the assessment years 1986-87, 1987-88 and 1988-89, the assessee filed original returns of income disclosing a total income of Rs. 23,730, Rs. 34,370 and Rs. 50,060 respectively, which were accepted under section 143(1) of the I.T. Act. Subsequent to the completion of assessment, a search under section 132 was conducted on 3rd August, 1989 in the assessee’s residential premises and also in the business premises of the firms in which the assessee was a partner. The assessee was a partner in (i) M/s. S. M. Bangarimath, Trichy, (ii) M/s. Bangarimath Bros., Madurai and (iii) M/s. Mamaseth & Co., Karur. Incriminating books/documents evidencing evasion of income were found and documents were seized by the Department. Subsequent to the search operations, the assessee filed revised returns of income on 26th March, 1993. The position regarding the income declared in the original returns as well as in the revised returns and the income assessed after the search operations as furnished by the CIT(Appeals) is as under :
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"Asst. year 1986-87 1987-88 1988-89 ---------------------------------------------------------------------- Date of filing of original 1-9-87 5-9-88 24-2-89 return Income returned Rs. 23,730 Rs. 34,370 Rs. 50,060 Net agrl. income returned Rs. 1,000 Rs. 1,000 Rs. 3,000 Date of order u/s. 143(1) 13-11-87 15-11-88 27-3-89 Section 143(1) 143(1) In the order u/s. 143(3) dt. 25-3-92 Income assessed - - - Net agricultural income determined - - - Date of filing of another return 26-3-93 26-3-93 26-3-93 Returned income Rs. 2,23,730 Rs. 3,84,370 Rs. 1,50,060 Net agricultural income determined Rs. 9,000 9,000 9,000 Date of service of a notice u/s. 148 29-3-93 29-3-93 29-3-93 In the order u/s. 143(3) r.w. sec. 147 dt. 31-3-93 Income assessed Rs. 2,23,730 Rs. 3,84,370 Rs. 1,50,060 Net agricultural income determined Rs. 9,000 Rs. 9,000 Rs. 9,000 Penalty levied u/s. 271(1)(c) Rs. 91,932 Rs. 1,59,975 Rs. 49,146" ----------------------------------------------------------------------
In the revised returns, therefore, the assessee disclosed additional income of Rs. 2,00,000 for the assessment year 1986-87, Rs. 3,50,000 for the assessment year 1987-88 and Rs. 1,00,000 for the assessment year 1988-89 which was not disclosed in the original returns of income. The Assessing Officer issued notice under section 148 read with section 147 for all the three assessment years. The Assessing Officer completed the assessments under section 143(3) read with section 147 on the total income declared by the assessee in the revised returns for all the three years. The Assessing Officer initiated penalty proceedings under section 271(1)(c) as there was concealment of income in the original returns filed by the assessee.
4. During the course of penalty proceedings, the Assessing Officer required the assessee to show cause why the penalty under section 271(1)(c) should not be imposed for all the three years for concealment of income. It was explained by the assessee that the assessee has made a statement of his undisclosed income under section 132(4) of the Income-tax Act and also specified the manner in which such income has been derived. But this explanation of the assessee was found to be false because the assessee has not admitted any undisclosed income in the statement recorded under section 132(4) of the Income-tax Act. It was also explained before the Assessing Officer that the assessee purchased coconuts from agriculturists and supplying them to M/s. Mamaseth & Co., after charging a small margin of profit. The assessee in the revised returns of income filed after the search, disclosed the income (refer to in the preceding paragraph) under the head ‘Other sources’. But the assessee has also disclosed the liabilities which may be offered for assessment for want of evidence. It was claimed before the Assessing Officer that the liabilities were genuine but there was no evidence to prove the genuineness of the liabilities and, therefore, the claim of the assessee regarding genuineness of the liabilities was not accepted by the Assessing Officer. The assessee did not produce any confirmatory letters in respect of liabilities. The assessee claimed that borrowed funds were utilised for investments but since there was no evidence to show the genuineness of the borrowed funds, the Assessing Officer came to the conclusion that the advances made to the agriculturists or investments made by the assessee were only out of income earned by the assessee from out of his own business of purchase and sale of coconuts to M/s. Mamaseth & Co. The Assessing Officer considered that but for the search by the Income-tax Department, the assessee could never have filed revised returns admitting higher income. Therefore, the Assessing Officer imposed penalty under section 271(1)(c) for the assessment years 1986-87, 1987-88 and 1988-89 for concealment of income.
5. It is argued by the learned counsel for the assessee that whatever income declared in the revised returns filed by the assessee after the search is not the assessee’s income. With a view to settle the tax matters and to purchase peace, the assessee filed voluntary returns in his individual capacity disclosing additional income under the head ‘Other sources’. Thereafter, the Assessing Officer issued notices under section 148 to regularise the assessments. It is argued by the learned counsel for the assessee that the assessments have been completed accepting the income declared in the revised returns without any further addition. It is stated that the assessee is a partner of certain firms and has no individual business activity. The assessee has made investments out of borrowals which were all genuine. However, since there were difficulties in disclosing the identity of the creditors and thereby proving the loans, the assessee offered the accretion in assets as income without claiming due credit for the liabilities and such income was disclosed under the head ‘Income from other sources’ after discussion with the Departmental Officials. The learned counsel relied on the following decisions :
(1) CIT v. J. V. Appadurai Chettiar Co. [1996] 221 ITR 849 (Mad.)
(2) CIT v. Pioneer Engg. Syndicate [1991] 188 ITR 287 (Mad.).
It is further argued by the learned counsel that if the assessee has offered the amount for lack of evidence and had also asked for dropping the penalty proceedings, the revenue has either to accept the letter as a package deal or make an assessment independently and proceed with the penalty proceedings. It is argued by the learned counsel that it is not possible to ignore one part of that letter waiving penalty while depending upon the other part of the same letter for making the assessment. He also referred to the decision of the ITAT in the case of Bansal Abhushan Bhandar v. Asstt. CIT[1995] 81 Taxman 107 (Delhi) (Mag.).
6. The learned Departmental Representative, on the other hand, argued that the assessee could not have filed the revised returns but for the search operation conducted in the premises of the assessee. The learned Departmental Representative also referred to the decision of the Madras High Court in the cases of (i) CIT v. Krishna & Co. [1979] ITR 144, (ii) H. V. Venugopal Chettiar v. CIT[1985] 153 ITR 376/23 Taxman 412 and the decision of the Allahabad High Court in the case of CIT v. Malhotra Cold Storage & Fruit Industries [1996] 219 ITR 131/86 Taxman 1. The learned Departmental Representative also invited our attention to page 19 of the paper book which is a letter dated 25-10-1989 by the assessee to the Assistant Director of Inspector, Trichy in which the assessee has admitted that he had kept outside accounts, certain loans which were utilised as advances for the agriculturists from whom he purchased coconuts. In the letter dated 25th October, 1989, the assessee has admitted that the loans and advances were recorded separately by the assessee and they have been seized by the department at the time of raid. The assessee has also admitted that he also recorded inflated purchases and the unaccounted money so generated was utilised by him to make advances to agriculturists who supplied coconuts to him.
7. We have considered the facts of the case, rival submissions and materials on records. Before considering whether the assessee is liable for penalty under section 271(1)(c) of the Act, it is considered necessary to refer certain decisions of the Courts.
8. In the case of S. S. Ratanchand Bholanath v. CIT[1994] 210 ITR 682 (MP), the facts of the case were that the assessee during the course of reassessment proceedings admitted that a sum of Rs. 11,027 relating to the sale of a tempo-van on account of wrong totalling was liable to be added to the income. The Assessing Officer passed a reassessment order adding Rs. 11,027 to the total income. The Assessing Officer also initiated penalty proceedings against the assessee. The assessee did not challenge the reassessment order in appeal. The Assessing Officer imposed penalty under section 271(1)(c). The appeal against it was dismissed by the Appellate Assistant Commissioner and the Tribunal. On a reference, the Madhya Pradesh High Court held that the Assessing Officer was justified in additing Rs. 11,027 to the income because the assessee itself informed the Assessing Officer that there was an error in the balance sheet to the extent of the amount. The assessee itself told the Assessing Officer that there was suppression of income to the extent of Rs. 11,027. This was also verified by the Assessing Officer. As the question of the authority in penal proceedings coming to any conclusion different from that arrived at in the reassessment proceedings did not arise. If the assessment order or reassessment order has become final, it was binding on both parties and neither party could seek to reopen it in a penalty proceedings. The ratio laid down by the Madhya Pradesh High Court in the case of S. S. Ratanchand Bholanath (supra) is fully applicable to the case of the assessee.
9. In the case of Tube Fabrico (I.) Ltd. v. CIT [1994] 210 ITR 1035/73 Taxman 198 (Delhi), the facts of the case were that in a search of the business and residential premises of the assessee-firm and its partners, information regarding sale of steel tubes worth Rs. 2,82,000 to M/s. B. R. Industries which was the personal business of the partner of the assessee-firm was discovered from the books of M/s. B. R. Industries. No corresponding entry in the assessee’s books was available. The assessee offered to get itself assessed on a sum of Rs. 2,25,010 but, instead of being taxed in the assessment year 1978-79, requested for a spread over of that amount for the assessment years 1974-75 to 1978-79 and filed revised returns for those years including the amounts spread over for each year. The Income-tax Officer levied penalty under section 271(1)(c) of the Act for concealment of income for those years and the Appellate Tribunal confirmed those levies. The Appellate Tribunal also rejected the assessee’s application for reference. The assessee filed applications in the High Court for an order directing the Tribunal to state a case. The Hon’ble Delhi High Court dismissed the application of the assessee and held that there was concealed income to the extent of Rs. 2,25,010 which was a finding of fact. It was at the instance of the assessee that the Department agreed for a spread over of the sum over a number of years. The mere fact that the assessee’s contention for spreading the addition of Rs. 2,25,010 over a number of years had been accepted could not be reason for a conclusion that the assessee was not guilty of concealment of its income. The very fact that the assessee filed revised returns was an admission on its part of concealment of income. The assessee could not plead an agreement because there could be no agreement or estoppel against a statute. When the statute itself cast a liability on the assessee, no agreement with the Department could entitle it to avoid that liability. Once assessment was made in respect of each of the assessment years by giving effect to the spread over, the only implication in law was that in each of those years there was concealment of income and the Tribunal having decided the question of fact that the total income concealed was Rs. 2,25,010 which was spread over, no question of law arose. Therefore, the Hon’ble High Court dismissed the application of the assessee for an order directing the Tribunal to state a case. The ratio laid down by the Delhi High Court in the case cited supra is fully applicable to the case of the assessee.
10. In the case before us, search operations were carried out by the Department in the assessee’s residential premises and also in the business premises of the firms in which the assessee was a partner. After the seizure of documents, the assessee admitted total income of Rs. 2,23,730 for the assessment year 1986-87, Rs. 3,84,370 for the assessment year 1987-88 and Rs. 1,50,060 for the assessment year 1988-89 in the revised returns filed. In the original returns filed by the assessee, the assessee has admitted only an income of Rs. 23,730 for the assessment year 1986-87, Rs. 34,370 for the assessment year 1987-88 and Rs. 50,060 for the assessment year 1988-89. The assessee offered concealed income in the revised return of income because, the assessee earned profits out of its own business and such profits were used for making advances to the agriculturists, which was offered under the head ‘Other sources’. When the assessee himself has admitted the concealment of income by filing the revised returns, the assessee could not plead that the income was offered to purchase peace with the Department because as held by the Delhi High Court in the case of Tube Fabrico (I.) Ltd. (supra), there can be no estoppel or agreement against a statute. When the statute itself cast a liability on the assessee, no agreement with the Department could entitle the assessee to avoid that liability. The assessment has been made in respect of each assessment years on the basis of income disclosed by the assessee in the revised returns filed and the only implication in law was that in each of those years, there was concealment of income.
11. In the case of H. V. Venugopal Chettiar (supra), the facts of the case were that in the course of the assessee’s wealth-tax proceedings for 1972-73, it came to light that the value of the assessee’s residential house was more than the admitted value of Rs. 50,000 and the Inspector after inspection estimated the cost of construction at Rs. 98,000 and was also of the opinion that the construction should have been spread over a period of three years. On the ground that the assessee had omitted to disclose in his books of account the cost of construction, notices to reopen the income-tax assessments for the three years 1969-70, 1970-71 and 1971-72 were issued. However, before the said notices could be served, the assessee filed returns purporting to be revised returns, in which he included a sum of Rs. 15,000 for each of the three assessment years under the head ‘Other sources’. The Income-tax Officer examined the assessee on oath in the reassessment proceedings and in his deposition the assessee admitted that the cost of reconstruction of the house was met out of his business income which was not recorded in accounts. He also admitted that the cost of the house was Rs. 95,000 as against the original cost of Rs. 50,000 already admitted by him. In the reassessments, the ITO made an addition of Rs. 18,000 for each of the three assessment years under the head ‘Business’. The ITO also levied penalty of Rs. 18,000 for assessment year 1971-72 under section 271(1)(c) which was reduced by the AAC to Rs. 15,000. The Tribunal confirmed the order of the AAC. On a reference under section 256(2), the Hon’ble Madras High Court held that the assessee has made a statement admitting suppression of Rs. 15,000 per year and this admission made at the stage of the reassessment proceedings has not been retracted by the assessee. In such circumstances, it was not necessary for the Department to make any independent enquiry to find out whether there was, in fact, any suppression and whether such suppression was due to any dishonest intention on the part of the assessee. Merely because penalty proceedings are independent of assessment proceedings, it cannot be said that the assessing authority should ignore all the materials collected at the assessment stage including the admission made by the assessee. The Hon’ble Madras High Court dismissed the assessee’s reference application and held that the Tribunal was justified in confirming the levy of penalty and no question of law arose out of the order of the Tribunal.
12. In the case of the assessee before us also, the ratio laid down by the Madras High Court in the case of H. V. Venugopal Chettiar (supra) is fully applicable. After the search operations incriminating documents showing advances to the agriculturists were seized by the Department. The assessee filed revised returns admitting huge concealed income. When the assessee himself has admitted concealed income, it was not necessary for the Department to make any independent enquiry to find out whether there was, in fact, any suppression and whether such suppression was due to any dishonest intention on the part of the assessee.
13. In the case of Banaras Chemical Factory v. CIT[1977] 108 ITR 96 (All.), the facts of the case were that the assessee made a voluntary disclosure of concealed income of Rs. 6 lakhs. While making the disclosure, the assessee also stated that the amount of penalty to be levied has not been agreed upon and it may be considered on merits after completion of assessments. In due course, the Inspecting Assistant Commissioner of Income-tax levied penalty of varying amounts for assessment years 1956-57 to 1965-66, which were the assessment years involved. In appeal, the Income-tax Appellate Tribunal by a consolidated order reduced the penalties to the minimum imposable under the Act. The assessee’s plea that it was not liable to penalty, was not accepted by the Tribunal. At the instance of the assessee, the Tribunal made a reference to the Allahabad High Court. It was argued before the Hon’ble Court that the assessments having been made on an agreed basis on the voluntarily disclosed income by the assessee, no penalty was leviable. The Hon’ble High Court held that the assessee having by a voluntary disclosure, disclosed a concealed income of Rs. 6 lakhs, there could be no manner of doubt that the assessee was guilty of concealment and, as such, was liable to penalty. The law does not provide that if an assessee makes a voluntary disclosure of its concealed income, it has to be absolved from penalty. It is a circumstances to be taken into consideration while determining the quantity of penalty and since minimum penalty was levied by the Tribunal, the Hon’ble High Court held that levy of penalty under section 27(1)(c) was justified.
14. In the case of Hakam Singh v. CIT [1980] 124 ITR 228/[1981] 5 Taxman 96 (All.), the facts of the case were that a search was conducted on 22nd November, 1973 and certain books were seized by the Income-tax Department. On 7th October, 1974, the assessee filed returns of income for the assessment years 1966-67, 1967-68, 1968-69, 1969-70, 1972-72 and 1973-74. The Income-tax Officer initiated penalty proceedings under section 271(1)(c). The assessee applied to the Commissioner under section 273A for waiver or reduction of the imposable penalty. The said petition was dismissed by the Commissioner on the ground that the filing of the returns was not voluntary since the returns were filed long after a search operation was carried out and the books of account of the petitioners were seized and were prompted by a sense of fear. The Hon’ble Allahabad High Court held that the inference that the returns were filed because the assessee was prompted to save himself from the consequence of not filing the return and that he was prompted by a sense of fear was justified. In the said case, their Lordships also explained the term ‘voluntary’. The term ‘voluntary’ has been used to indicate an action free of any constraint. A return filed under the constraint of exposure to adverse action by the I.T. Department will not be voluntary within the meaning of section 273A. Though for the purpose of levy of penalty under section 271(1)(c), the issue of filing of voluntary returns of income is not material because the assessee in the appeal before us has filed revised returns after the search carried out by the Department at the residential premises of the assessee and business premises of the firm in which the assessee is a partner. Such revised returns filed were under the constraint of exposure to adverse action by the Income-tax Department and are not even voluntary. As the assessee was prompted by sense of fear after the seizure of documents and filed revised returns of income when the assessee came to know that his game was up.
15. In the case of Mohd. Ibrahim Azimulla v. CIT[1981] 131 ITR 680 (All.), the assessee filed revised return. The Hon’ble Allahabad High Court held that section 139(1) of the Act, makes it obligatory on an assessee, whose income exceeds the maximum, which is not chargeable to income-tax, to file a return of this total income. In this case, the High Court considered that the amount of Rs. 61,460 which was revealed in the revised return was not on account of discovery of a mistake after the filing of the original return but of deliberate omission of a fact which was in the knowledge of the assessee which the assessee attempted to conceal with a view to evade tax till end and came out with the disclosure only when it became sure that his game was up.
16. Similarly, in the present case, the assessee filed returns and disclosed income which was not deliberately disclosed in the original returns and the concealed income was admitted in the revised returns only when the assessee became sure that there is no alternative except the disclosure of correct income after the department conducted search and seizure operations. Incriminating documents and books of account were seized which contained concealed income of the assessee.
17. In the case of CIT v. K. Mahim [1984] 149 ITR 737/[1983] 15 Taxman 557 (Ker.), the original assessment of the assessee was reopened. Investigation was conducted by the Income-tax Department and the assessee filed revised return voluntarily and assessments were completed on that basis. The Hon’ble Kerala High Court held as under :
“Courts of law are not concerned with the social philosophy behind a heavy dose of taxation or about the social attitudes in the matter. The laws enacted by Parliament, including the penal provisions thereof, have to be interpreted on their plain terms and given effect to, regardless of other considerations. If stringent measures such as section 271 of the I.T. Act, 1961, are enacted, neither the courts (nor the taxation authorities nor the Tribunal) can render them nugatory by adopting a fundamentally erroneous approach to the statutory scheme ….
The submission of the revised return may, in given cases, be voluntary, but such a voluntary filing by itself does not lead to the conclusion that there was no intention on the part of the assessee to conceal his income when he filed the original return. That depends upon the facts and circumstances which throw light on the mental process of the assessee at the time of the submission of his original return. A subsequent conduct may be one of the factors which could be duly taken note of in the process of that difficult decision. However, mere filing of a revised return by the assessee at any time prior to the Department cornering the assessee in relation to a particular concealed income, would not be sufficient to exonerate the assessee from the penal consequences. The mere fact that investigation by the Department is a fool, though nothing tangible had come into the possession of the Department at any particular point of time, may induce a dishonest assessee to submit a revised return. Such an exercise will not absolve him of the consequences flowing from an act which on his part had already been completed, namely, the concealment of income or the particulars thereof. Conversely, it may so happen that an assessee realises the error or omission in his original return, when the assessment proceedings including investigation by the officials of the Department, had progressed to a considerable stage; if the omission or error in the submission of the first return is honest and bona fide, the fact that the submission of the revised return is belated, and after investigation had advanced much, by itself, will not visit him with penal consequences.
The assessment of the assessee for the relevant assessment year was reopened by the ITO and detailed enquiries were pursued in respect of the same. The assessee, however, filed a revised return voluntarily and the assessment was completed by the ITO on that basis. Thereafter, the ITO issued notice to the assessee under section 271(1)(c) of the Income-tax Act, 1961, for concealment of income and referred the matter to the IAC. The assessee contended before the IAC that inasmuch as he had filed the revised return voluntarily and that the assessment had been completed on the basis of such revised return, the levy of penalty would be invalid as no concealment could be established with reference to the revised return. The IAC rejected the contention of the assessee and imposed penalty on him. On appeal, the Tribunal cancelled the penalty on the ground that so long as the assessment proceedings were pending and investigations were being conducted by the Department, an assessee could rectify a return by filing a revised return under section 139(5), before the Department became aware of the particular activity in respect of which the income was concealed. On a reference :
Held, that the filing of a revised voluntarily by the assessee when he knew that the Department was conducting investigations against him would not exonerate the assessee from the liability to penalty under section 271(1)(c) of the Act.
Penalty under section 271(1)(c) is geared to the amount of the income in respect of which the particulars have been concealed or inaccurate particulars have been furnished. The correct income of the assessee, after the assessments have become final, cannot be a matter of conjecture.”
18. In the case of CIT v. J. K. A. Subramania Chettiar [1977] 110 ITR 602 (Mad.), the assessee filed a return of income on 16th March, 1964 which included a business income of Rs. 21,655 and in the second return filed on 7th February, 1968, the business income disclosed was Rs. 69,143. In the assessment completed on 31st December, 1968, the business income was shown at Rs. 3,09,645. The Assessing Officer initiated penalty proceedings and levied penalty under section 271(1)(c). The Tribunal cancelled the penalty. The Hon’ble Madras High Court held that if a case does not fall under section 139(5), the fact that the revised return was filed before any investigation was started by the Income-tax Department will be of no consequence. The fact that the assessee furnished the particulars before any detection was made by the department or not will be relevant only when the Commissioner is considering the question whether the minimum penalty imposable under section 271(1) should be waived or reduced, on an application made by the assessee under section 271(4A), but they are foreign to the scope of section 271(1)(c).
19. In the case of CIT v. Dr. R. C. Gupta & Co. [1980] 122 ITR 567/3 Taxman 501 (Raj.), the assessee himself has admitted that a certain amount represented his income. The Hon’ble High Court held that no further evidence would be necessary to show that it was the amount which represented his income and/or that it represented his concealed income. Similarly, in the case of Krishna & Co. (supra) (relied upon by the Departmental Representative), the facts of the case were that the books of the assessee showed certain borrowings and repayments from certain bankers. The assessee produced the discharged hundis before the ITO who, however, held that the bankers had merely lent their names in what was know as bogus hawala transactions. The assessee, thereupon, agreed to the addition of the peak credit to his income. In the penalty proceedings, the assessee’s submission that no penalty was exigible was rejected by the I.A.C. but accepted by the Tribunal. On a reference, the Hon’ble High Court held that in a case where the assessee himself has admitted that the amount represented his own income, no further evidence would be necessary to show that it was the amount which represented his income and it represented his concealed income. In the case before us, the assessee had himself stated before the Department that he had kept separate accounts, certain loans and advances which were recorded separately in the accounts seized by the Department at the time of raid. The assessee admitted that he inflated purchases and the unaccounted money so generated was utilised to make advances to agriculturists. In view of these facts, no further evidence is necessary to show that the income was concealed by the assessee.
20. After examining the propositions of law laid down by the various High Courts in the preceding paragraphs, we are of the opinion that the assessee has concealed particulars of his income or furnished inaccurate particulars thereof in the original return for the assessment years 1986-87, 1987-88 and 1988-89. After the search was conducted, the assessee himself filed a letter dated 25th October, 1989, to be Assistant Director of Inspector, Trichy and admitted as under :
“I have brought all sales which were almost entirely outside Tamil Nadu, to the accounts. But I have kept outside accounts certain loans, which I utilised as advances, for the agriculturists from whom I purchased coconuts. These loans and advance were recorded separately by me and they have been seized by you at the time of the raid. I recorded in my accounts, inflated purchases and the unaccounted money so generated was utilised by me to either (a) make advances to agriculturists who supply coconuts to me or (b) repay some of the loans, I have taken outside my accounts or (c) to meet some unaccounted expenses or investments.
I am anxious to settle my tax matters, by ascertaining and admitting my undisclosed income.
You can have my solemn assurance, that I shall not misuse or manipulate any evidence, as I am convinced, it will not serve my interest.”
Similarly, the assessee vide letter dated 30-3-1992 to the Assistant Commissioner, admitted as under :
“To
The Assistant Commissioner (Investigation – I),
Income-tax Department,
Trichy.
Sir,
Sub : I.T. Asst. 1989-90 – Mr. S. Sivakumar, Karur – Additional Income offering of –
I. The details of advances made to certain parties for the purchase of coconuts and certain liquidation of liabilities, others both outside the accounts during the year had come to Rs. 9,97,500 as per details set out below :
Annexure-I
(a) Advances to parties for the purchase of accounts Rs. 2,97,000
(b) Lorry Instalment dues paid into SBI Rs. 26,000
Annexure-II
(c) Liabilities to Mr. Shanmukayya, Madurai. Rs. 1,63,000
Annexure-III
(d) Difference in cost of construction Rs. 33,000
Annexure-IV
(e) Purchase of Two Lorries Rs. 4,78,500
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Total Rs. 9,97,500
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These were met from the following sources outside the accounts :
(1) Purchase inflation (NET) Rs. 2,58,700
(2) Fibre Receipts Rs. 46,900
(3) Lorry Hire Charges (NET) Rs. 35,000
(4) Loan from various parties :
Lorry loan Rs. 97,000
S.B.I. Rs. 2,42,000
Others Rs. 3,18,500 Rs. 6,57,500
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Total Rs. 9,98,100
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II. Hire receipts, income from Lorries and, inflation in purchases, less depreciation due on Lorries, is Rs. 1,01,400 as per working below :
(a) Fibre Receipts Rs. 46,950
(b) Lorry Hire Charges (NET) Rs. 35,000
(c) Inflation Rs. 2,58,700
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Rs. 3,40,650
Less : Depreciation on Lorries Rs. 2,39,250
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Balance Rs. 1,01,400
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This additional income is now being offered for assessment. It may kindly be accepted.