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Cit v. Manohar Lal - INCOME TAX REFERENCE No. 18 of 1996 [2005] RD-AH 1119 (25 April 2005)


This is an UNCERTIFIED copy for information/reference. For authentic copy please refer to certified copy only. In case of any mistake, please bring it to the notice of Joint Registrar(Copying).




The Commissioner of Income-tax, Kanpur. ....Applicant


Manohar Lal, Kanpur. ....Respondent


Hon'ble R.K. Agrawal, J.

Hon'ble Rajes Kumar, J.

The Income Tax Appellate Tribunal, New Delhi has referred to following question of law under section 256 (2) of the Income Tax Act, 1961, (hereinafter referred to as "the Act") for opinion of this Court.

" Whether on the facts and in the circumstances of the case the I.T.A.T. was justified in dismissing the appeal filed by the Department and confirming the order of CIT( Appeals) holding that the conditions laid down in Explanation 5(2) to section 271(1)(c) were fulfilled and no penalty was leviable u/s 271(1)(c) ?"

The present Reference relates to the Assessment Year 1990-91.

Brief facts of the case are that during the course of a search at the business premises of the assessee on 23rd August, 1989, a surrender of Rs.47,000/- in cash and unexplained investment in jewellery and house-hold items of Rs.14,00,000/- was made. This being a composite figure, in response to the notice issued under section 148 the assessee filed a return showing an income of Rs.1,58,940/- which included the following amount representing part of surrender under section 132(4) of the Act:-

"Income from other sources:

1. Investment in furniture Rs.12,000/-

2. Investment in 4 Gysers      10,000/-

3. Investment in Kelvinator

Fridge.        7,000/-

4. Investment in 2 VCRs'       26,000/-

5. Cash       17,000/-




Assessment was completed on a figure of Rs.2,44,980/- which was eventually finalised at Rs.1,91,360/- in appeal which is inclusive of the aforesaid amount of Rs.72,000/-.

Penalty proceedings were initiated under section 271(1)(c) and the Assessing Officer was of the view that the conditions of Explanation 5 to this provision were not fulfilled. He, therefore, imposed a penalty of Rs.50,000/-. In appeal, penalty was cancelled, which view was confirmed by the Tribunal.

The Tribunal while deciding the appeal followed a decision of Shri Radha Kishan Goel rendered in I.T.A. No.207 (Alld)/1992 has held as follows:

" After hearing the parties at length and after perusing our own order in the cae of Radha Kishan Goel, we are of opinion that the facts of that case were practically similar as the facts of the present case and we do not find any infirmity in the order of the learned C.I.T.(A) who has deleted the penalty following our order in the said case Radha Kishan Goel (supra). As till today, the said order stands and no contrary view has been expressed by our Hon'ble Jurisdictional High Court, we respectfully following our own order and adopting the same reasoning hold that the order of the learned C.I.T.(A) was perfectly correct and justified and does not call for any interference."

Heard learned Standing Counsel appearing on behalf of Revenue and Sri Shakeel Ahmad, learned counsel for the assessee respondent.

Both the counsel agreed that the issue involved in the present case is similar to the issue involved in I.T.R. No.111 of 1993, CIT Vs. Shri Radha Kishan Goel, Banda, decided on 21.04.2005 in favour of the assessee and against the Revenue.

Respectfully following the aforesaid decision in I.T.R. No.111 of 1993, CIT Vs. Shri Radha Kishan Goel, Banda decided on 21.04.2005, we answer the question referred to us in the affirmative, i.e. in favour of assessee and against the Revenue.




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