This appeal by assessee arises out of order of AAC sustaining penalty of Rs. 22,600 imposed by ITO under section 271(1) (c) of Income-tax Act, 1961 ('the Act') relating to assessment year 1976-77. 2. facts briefly stated are that during course of examination of account books of assessee, it was noticed by ITO that assessee introduced sum of Rs. 21,600 in his cash book on 17-5-1975, under narration 'drawn from Punjab and Sind Bank'. ITO on comparison with accounts of Punjab and Sind Bank noticed that no such amount was withdrawn from bank. On further examination of accountant books, he noticed that assessee withdrew sum of Rs. 21,600 from books of account on 17-6- 1975 again under narration 'to Punjab and Sind Bank'. When bank pass book of assessee was examined by ITO, it was found that assessee did not deposit this amount of Rs. 21,600 in bank on 17-6-1975 as mentioned in cash book. ITO therefore, came to conclusion that it clearly established that assessee first introduced its own unexplained money on 17-5-1975 and then withdrew same on 17-6-1975 from cash book under factious name of Punjab and Sind Bank in both cases. It was stated before ITO by assessee in its letter dated 17-5-1975 that out of cash introduced on 17-5-1975 amounting to Rs. 21,600 peak amount utilised from 7-5-1975 to 17-6-1975 was only Rs. 10,876. It was further urged that addition of Rs. 10,000 was made in last year while finalising assessment. ITO had not accepted above explanation. According to him, amount introduced on 17-5-1975 of Rs. 21,600 under garb of 'drawn from Punjab and Sind Bank' remained unexplained. He, therefore, treated amount of Rs. 21,600 as then assessee's income from undisclosed sources in view of provisions contained in section 68 of Act. Before AAC, assessee did not dispute facts relating to cash credit as mentioned in order of ITO. It was, however, contended that entries made in case book in respect of cash credit of Rs. 21,600 were on account of mistake on part of accountant who had written account books. It was also contended that this amount was not required on 17-5-1975 when said entry was made. maximum cash which had been utilised out of said sum of Rs. 21,600 was admitted at Rs. 10,876. It was claimed that assessee-firm had subsequently disclosed under Voluntary Disclosure Scheme sum of Rs. 10,000 for accounting period relevant to assessment year 1975-76 on 30-12-1975 and sum of Rs. 7,000 after payment of taxes, etc., was credited in account books on 18-1-1976. It was, therefore, urged that sum of Rs. 10,000 was available with assessee-firm outside books of account when said sum of Rs. 10,876 was utilised on 30-5-1975 out of said cash credit. It was, therefore urged that no addition on account of unexplained cash credits should have been made. These submissions did not find favour with AAC who upheld addition made by ITO. assessee carried matter in appeal before Tribunal who vide its order dated 28-11-1981 in IT appeal No. 210 of 1980 has also upheld addition made by ITO and sustained by AAC. observations of Tribunal in paragraphs 7 to 10 are reproduced below for ready reference: "7. After taking into consideration rival submissions and very careful perusal of facts stated at different stages, somehow differently, also we are unable to interfere in finding of Appellate Assistant Commissioner. slippery grounds which are taken from time to time by assessee not only causes suspicion but makes us of firm opinion that explanations given by assessee in respect of Rs. 21,600 finally before us are also false. As above stated, learned counsel for assessee could not controvert fact that Punjab and Sind Bank had nothing to do with said amount of Rs. 21,600. Before us he did not reiterate submissions made earlier before Income- tax Officer that it was result of mistake of one keeping accounts nor did he highlight that cash was not needed when it was introduced, though from careful perusal of Appellate Assistant Commissioner's order it is apparent that it was needed during one month period it stayed with assessee as per book entries, though partly little more than half amount introduced. From perusal of copy of voluntary disclosure made, we find that on 31-3-1977 Rs. 10,000 were disclosed by assessee, though his status of declarant is not available on said copy but it seems to be in respect of assessee-firm itself as permanent account No. given is 6914 on said declaration and also as borne out by record. Undoubtedly said amount has been shown as cash. As per observations of Income-tax Officer that peak amount utilised was to extent of Rs. 10,876 on 30-5-1975 there is no dispute. We are in agreement with observations of Appellate Assistant Commissioner that mistake of employer could not further case of assessee because it was sum of Rs. 10,876 already utilised out of said cash credit. Regarding co-relating sum of Rs. 10,000 to voluntary disclosure, if it were so, at least in course of voluntary disclosure assessee could voluntarily come forward as long as on 31-3-1977 that this amount was partly in favour of bogus credit in name of Punjab and Sind bank because assessment order is dated 7-3-1979. 8. Regarding utilisation of intangible additions, we are convinced with arguments of learned department al representative. It is not case where this contention could have been accepted by revenue on concession. To us, it seems to be cock and bull story on different occasions with different versions with only aim that said credit of Rs. 21,600 should be got treated as genuine. reliance of learned counsel for assessee on case of CIT v. Ram Sanehi Gian Chand [1972] 86 ITR 724 (Punj. & Har.) is correctly placed in respect of first finding of their Lordships 'that Tribunal had discretion to allow new contention raised before it under power to be spelt out from rule 11 of Income-tax (Appellate Tribunal) Rules, 1963'. Regarding reliance on second part of order that assessee was entitled to take advantage of past intangible additions to explain source of what was considered by Income-tax Department as income from undisclosed sources, we are afraid it is not clear case which could derive some breath from this finding. Besides, substantial difference in facts in case of Ram Sanehi Gian Chand (supra) and instant case, it was not ordinary party in whose name credit was introduced but bank and that entry too was squared up within short span of time, i.e., one month, which could clearly neither effect opening balance nor closing balance. As per latest legal pronouncements, revenue is also supposed to unvail affairs and find out truth. When we go through Supreme Court Judgment in case of Anantharam Veerasinghaiah & Co. v. CIT [1980] 123 ITR 457, at outset we find that it supports contention of assessee when head note is read to start with but time second part is read, reliance of learned departmental representative on this case is found to be correctly placed, as is apparent from following observations of their Lordships: '... that though addition to book profits in earlier year could constitute fund from which assessee might draw subsequently for meeting expenditure or introducing amounts in account books, Tribunal erred in law in confirming itself to fact that intangible addition had been made to assessee's book profits in earlier year and that part of amount remained available to assessee thereafter. Tribunal had to consider, from overall consideration of all relevant facts and circumstances, whether unexplained cash credits would be reasonably attributed to pre-existing fund of concealed income or they were reasonably explained by reference to concealed income earned in relevant year...' Instant is case where when we consider from overall consideration of all relevant facts and circumstances whether unexplained cash deposit and cash credit could reasonably be attributed to pre-existing funds of concealed income or they are reasonably explained by reference to concealed income earned in relevant year, we find reply emanating from fact is negative. All relevant facts and circumstances in this case on this issue go against assessee. 9. Before parting with issue, we also find that intangible additions are made in case of firm, registered partnership firm where division of profits in favour of intangible additions is very big presumption because it is case of registered partnership firm and credit under circumstances in case of firm could not be explained out of such additions and also in light of circumstances as discussed above. 10. assessee's contention is rejected in respect of this ground of Rs. 21,600 introduced falsely in name of Punjab and Sind Bank on 17-5-1975." 3. ITO also initiated penalty proceedings under section 271(a) (c) and imposed penalty of Rs. 22,600 which is 150 per cent of tax sought to be evaded against minimum penalty imposable at 100 per cent and maximum penalty at 200 per cent. AAC upheld penalty imposed by ITO. submissions before AAC were that - (a) entries in cash book regarding amount of Rs. 21,600 made on 17-5-1975 and 17-6-1975 were due to bona fide mistake on part of persons maintaining books of account; (b) assessee had disclosed sum of Rs. 10,000 on 31-12-1975 under Voluntary Disclosure Scheme. This amount of Rs. 10,000 was available with assessee on 17-5-1975. Further amount of Rs. 10,000 added in total income of assessee for assessment year 1975-76 was also in hand. amount of Rs. 21,600 introduced in books of account on 17-5-1975, therefore, comprised of these two amounts of Rs. 10,000 each. assessee was, therefore, entitled to take credit for these two amounts; and (c) No deliberate concealment of particulars on part of appellant was established by ITO. Therefore, no penalty under section 271(1) (c) could be imposed. Reliance was placed on decision of Hon'ble Supreme Court in case of CIT v. Anwar Ali [1970] 76 ITR 696. 4. AAC rejected all above contentions for following reasons: assessee introduced amount of Rs. 21,600 on 17-5-1975 in guise of fictious withdrawal from its account with Punjab and Sind Bank Ltd. n d again withdrew amount from books of account under same caption. This was not real source of credit for purpose of withdrawal. These fictitious entries, therefore, establish that entries in case book were bogus, and Punjab and Sind Bank had nothing to do with amount of R s . 21,600 either on 17-5-1975 or 17-6-1975. assessee, therefor, deliberately made these entries with mala fide intention of concealing true particulars of its income. According to AAC, this showed guilty and contumacious conduct which resulted in deliberately furnishing of inaccurate particulars of its income. He, therefore, held that judgment of Hon'ble Supreme Court in case of Anwar Ali (supra) was not applicable to facts of case. Regarding that mistake was bona fide one on part of persons who maintained books of account, AAC observed that this was already found to be incorrect, as assessee itself admitted that funds to extent of Rs. 10,876 were utilised out of these funds introduced in books of account and this amount could be so utilised only when it was introduced earlier. it was, therefore, not merely entry by mistake but actual cash was introduced. Regarding explanation that these were out of voluntarily disclosed income of Rs. 10,000 and intangible addition of Rs. 10,000 made in assessment year 1975-76, AAC held that narrations under which amount was introduced and withdrawn belie explanation of assessee. Further, there is no basis for this explanation inasmuch as no co-relation between amount disclosed and amount introduced in books of account was available. He also observed that assessee was partnership concern. Whatever funds representing intangible additions in earlier years may have been, same must have been divided amongst partners, and they must have taken them away. Finally, he observed that clear and uncontroverted position that emerged from material facts was that assessee was guilty of contumacious conduct which consciously and intentionally aimed at furnishing of inaccurate particulars of its income. He, therefore, held that penalty under section 271(1) (c) was clearly exigible. He confirmed penalty imposed by ITO as such. 5. assessee is aggrieved against above order of AAC and is in second appeal before Tribunal. At outset, Shri D. S. Gupta, learned counsel for assessee, pointed out that in assessment order passed by ITO on 7-3-1979 under section 143(3) of Act, while initiating penalty proceedings, he observed as under: "Penalty notice under section 274 , read with section 271(1) (c), for concealing particulars of his income or furnishing inaccurate particulars of such income has separately been issued." He urged that as per notice, charge was that assessee had concealed particulars of income or furnished inaccurate particulars of such income. He submitted that initiation of proceedings under section 271(1) (c) and order passed by ITO were illusory inasmuch as ITO was not sure as t o whether charge was for concealing particulars of income of for furnishing inaccurate particulars of such income. According to him, unless specific charge was framed, assessee could not explain its conduct. He, therefore, urged that initiation of proceedings was bad in law and penalty order passed in same terms was also bad ab initio. He, therefore, urged that AAC in such circumstances was not justified in holding that assessee had furnished inaccurate particulars of its income. He referred to Explanation below section 271(1) (c) and urged that controversy was as to whether addition or disallowance were on account of concealment of particulars of income or on account of having furnished inaccurate particulars of such income or it was on account of both. He further urged that in view of above Explanation, ITO could give direction in his order under section 143(3) , after his satisfaction, to issue notice under section 274 , read with section 271(1) (c) o f Act, for concealing particulars of income and not for furnishing inaccurate particulars of such income. He also urged that in view of deeming provisions as contained in part (B) of said Explanation charge had to be specific and not illusory as in present case. Therefore, penalty so levied was void ab initio. learned counsel for assessee also urged that question might arise that if at all additions and disallowances are to be covered by expression 'concealment of particulars of income' in view of part (B) of Explanation 1, alternative charge of furnishing inaccurate particulars of income as mentioned in section 271(1) (c) will become redundant. Lastly, he urged that on basis of section 68, amount represented in case credit of Rs. 21,600 could be deemed to be income of assessee but it could not be treated as such for purposes of levying penalty under section 271(1) (c) . For this proposition, he relied on decision of Calcutta High Court in CIT v. Bhuramal Manikchand [1981] 130 ITR 129. 6. Shri R. K. Bali, learned senior departmental representative, on other hand, contended that in present case, case of revenue was covered under both situations, i.e., assessee concealed particulars of income and also furnished inaccurate particulars of such income. He submitted that firstly, assessee did not disclose in return or documents accompanying thereto that it had introduced fictitious cash credit of Rs. 21,600 in garb of withdrawal from Punjab and Sind bank. It was only on scrutiny of books of account by ITO, he detected such cash credit with fictitious narrations as withdrawn from bank and deposited in bank. He further submitted that even when called upon to explain source thereof, assessee did not come forward with true state of affairs. It tried to furnish contradictory explanations one after another. At one time it was stated that it was on account of mistake of accountant that wrong entry was made. At another time it was stated that it was out of voluntarily disclosed income of Rs. 10,000 and out of intangible additions of past. Even in explanations facts furnished were inaccurate. He, therefore, urged that initiation of proceedings by ITO and subsequent issue of notice by him were not illusory. They contained positive charges of concealing particulars of income and also furnishing inaccurate particulars of income as contemplated in clause (c) of section 271(1). He also contended that in this case, neither ITO nor AAC invoked Explanation 1 below section 271(1) (c) . On contrary penalty was imposed by ITO under main provisions of section 271(1) (c) . He urged that ITO had positively provided contumacious conduct on part of assessee and also that assessee had deliberately attempted to conceal its income and also to furnish inaccurate particulars of such income as contemplated in main provisions of Act. He urged that Explanation I will come to rescue of ITO only when he was unable to prove that there was deliberate and calculated act on part of assessee to conceal income. In regard to contention on behalf of assessee that no penalty could be imposed for deemed income under section 68, he relied on decision of Supreme Court in CIT v. Smt. P. K. Kochammu Amma Peroke [1980] 125 ITR 624 wherein it was held that amounts representing shares of spouse and minor daughter were not shown in return of income but required to b e included under section 64 of Act attracted applicability of section 271(1) (c). It was also deeming provision. He also relied on judgment in 103 ITR 404 (Ori.) (sic.). Reliance was also placed on judgments of Hon'ble Punjab and Haryana High Court in CIT v. Behari Lal Pyare Lal [1977] 107 ITR 587. Hindustan Tools Mfg. Co. v. CIT [1976] 102 ITR 174 and CIT v. Aya Singh Ishar Singh [1973] 92 ITR 182 where non-disclosure of profits under section 41(1) of Act was held to be concealment of income. He also referred to another decision of Hon'ble Punjab and Haryana High Court in case of Ambala Electric Supply Co. Ltd. [IT Reference No. 64 of 1976, dated 3-2-1981] upholding penalty for concealment of deemed income under section 41(1). 7. We have very carefully considered rival submissions. It may be pointed out that issue regarding charge being illusory under similar circumstances came up for consideration before Chandigarh Bench of Tribunal in case of Gulati Stores [IT Appeal No. 354 of 1982] for assessment year 1977- 78. contention of assessee was negatived by Tribunal vide its order dated 29-3-1984. Relevant extract from said order is reproduced below: "Reliance on case of CIT v. Vegetable Products Ltd. [1973] 88 ITR 192 (SC) is also misplaced because it is not question of two interpretations in instant case. main spring being cases of Gujarat and Gauhati High Courts, relied upon by learned counsel for assessee, was denial of opportunity that once show-cause notice for concealment of particulars of income was served, penalty cannot be levied for furnishing of inaccurate particulars. But it is not so in instant case. Once show-cause notice bears both limbs, viz., furnishing of inaccurate particulars or concealment of particulars, though words 'or' is there between two in statute but it does not mean that in case it is furnishing of inaccurate particulars it cannot be concealment of particulars of income. Sometimes it could be one but often it is both. In this regard, reliance of learned departmental representative in case of Rehmat Development & Engg. Corpn. (supra) is correctly placed in which it was held: '... that, in instant case, IAC upheld both charges and so there was no inconsistency between notice issued by ITO and findings given by IAC. Moreover, assessee had been given sufficient opportunity t o refute both charges. facts showed that inaccurate particulars of investments which were furnished was modus operandi to conceal real income of assessee. imposition of penalty was therefore, valid'." We entirely agree with above conclusions arrived at by Tribunal. another important thing to be noted is that in present case, assessee did not disclose anything about credit to Income-tax Department either in return or in any explanation attached to return. It was therefore, undoubtedly case of concealing particulars of income. It was as result of scrutiny by ITO that he detected deposit. When called upon, assessee did not come forward with true facts. He tried to explain it by giving explanations which were contradictory to each other. At one stage it was contended that no deposit made and entries were made due to mistake of accountant. When confronted with situation that assessee had utilised cash to extent of Rs. 10,876 then it came forward with explanation that assessee had cash of Rs. 10,000 available with him which was subsequently disclosed under Voluntary Disclosure Scheme in December 1975 and again intangible additions of similar amounts were made in past which were also available with assessee. It is, therefore, case where assessee concealed particulars of his income and also furnished inaccurate particulars of such income. Then we have to consider whether assessee had any doubt in its mind about charge levied against it so as to make it illusory. Show-cause notice as to why penalty under section 271(1) (c) s hould not be imposed was duly served upon assessee. assessee never raised objection that charge was illusory. On contrary it furnished explanation which clearly shows that assessee fully understood as to what was charge. Again, whether it is concelment of prticulrs of income or furnishing inaccurate particulars of such income, end result in both cases is suppression of income which was otherwise includible in total income of assessee. we, therefore, do not find any merit in contention made on behalf of assessee that charge was illusory which vitiated initiation of penalty proceedings. 8. Another important issue to be considered is, when addition had been made by taking resort to provisions contained in section 68 whether penalty under section 271(1) (c) can be imposed in relation thereto. submission of learned counsel for assessee was that cash credit was not income but it was only because of deeming provisions of section 68 that this was treated to be income of assessee and, therefore, no penalty under section 271(1) (c) could be imposed in respect of such deemed income. This issue is squarely covered by judgment of Orissa High Court in case of CIT v. Ganpatrai Gajanand [1977] 108 ITR 403. Their Lordships of Orissa High Court held that there was no distinction between income arising on account of section 68 and income earned otherwise. It is further held that definition of 'income earned otherwise. It is further held that definition of 'income' is inclusive. Therefore, amount which is deemed to be income by operation o f law is also income to which provisions of section 271 will apply. Hon'ble Punjab and Haryana High Court in Behari Lal Payare Lal's case (supra), Hindustan Tools Mfg. Co.'s case (supra) and Aya Singh Ishar Singh's case (supra) has also held that deemed income under section 41(1) is also liable to penalty under section 271(1) (c) . In case of Ambala Electric Supply Co. (supra), their Lordships of Punjab and Haryana High Court have held that penalty under section 271(1) (c) i s also attracted where income is included in total income of assessee in view of deeming provisions contained in section 41(2). According to section 41(2) , where any building, machinery, plant or furniture owned by assessee and used for purposes of business or profession is sold, discarded, demolished or destroyed, and moneys payable in respect of such building, machinery, plant or furniture, as case may be, together with amount of scrap value, if any, exceed written down value, so much of excess as does not exceed difference between actual cost and written down value, shall be chargeable to income as income of business or profession of previous year in which moneys payable for building, machinery, plant or furniture became due. effect of these provisions is that depreciation allowed earlier on assets referred to above is deemed to be income of year in which such asset is sold, etc., to extent it was allowed in earlier years. In fact there is no real income but by operation of law it is taken as assessee's income equivalent to amount of depreciation already allowed. Their Lordships have held that where it is treated as income even by virtue of deeming provisions, it has to be declared by assessee in total income. Failure to do so will attract penalty under section 271(1) (c). 'Income' has been defined under section 2(24) of act. definition is inclusive and not exhaustive. It shall, therefore, include income whether real or deemed which are assessable under Income-tax Act. There is no dispute that case credits are assessable as income under deeming provisions of section 68. In ratio of decisions of Hon'ble Punjab ns Haryana High Court and of Orissa High Court referred to above, we are of opinion that provisions of section 271(1) (c) are attracted in cases of deemed income assessed under section 68. We, therefore, do not find any merit in this contention made on behalf of assessee as well. 9. Another point raised by Shri Gupta, learned counsel for assessee, was that part (B) of Explanation 1 below section 271(1) (c) was not attracted in this case. contention of Shri Bali, learned departmental representative was that Explanation was not invoked by ITO as it was held by authorities below that assessee had deliberately concealed particulars of his income and, therefore, penalty was imposed under main provisions of Act. We agree with Shri Bali on this point. Where penalty has been imposed under main provisions of Act, it is not necessary to invoke deeming provisions by ITO. ITO has clearly proved that assessee had made false entries in books of account by mentioning name of bank when actually no transactions were made with bank. In garb of deposit and withdrawal from bank, assessee introduced its own money which was held back from department. We also find merit in submissions made on behalf of revenue that assessee has given contradictory explanations one after another which clearly established contumacious conduct on part of assessee. 10. Another submission on behalf of assessee was that credit for income voluntarily disclosed and also intangible additions in past should have been given by ITO. We do not find any merit in this contention as well. There is no co-relation between income introduced in books of account and voluntarily disclosed income as well as intangible additions in past. onus is upon assessee to co-relate same as it is alleged by it. We also notice that even intangible additions and voluntarily disclosed income put together are of Rs. 20,000 whereas cash deposit was at Rs. 21,400. There is no explanation for balance amount of Rs. 21,400. This clearly shows that deposit of Rs. 21,400 was not out of these intangible additions and income voluntarily disclosed subsequently. This contention on behalf of assessee is alsos rejected. In view of above discussions, we have no hesitation in confirming order of AAC sustaining penalty under section 271(1) (c). 11. In result, appeal is dismissed. *** JANTA SERVICE STATION v. INCOME TAX OFFICER