JUDGMENT V. Khalid, J. 1. The question referred to this Court by the Income-tax Appelate Tribunal, Cochin Bench, is in these terms: "Whether on the facts and in the circumstances of the case the imposition of penalty under section 271 (1) (c) of the Income-tax Act, 1961, on the applicant firm for the year 1964-65 is justified or warranted and whether it is legal and valid?" 2. The assessee firm, who builds boats and exports them outside India, returned a total income of Rs. 99,993 made up as hereunder: Income from property Rs. 1,200.00 Income from business Rs. 98,793. Total Rs. 99,993.00 3. During the accounting year, the assessee built 9 boats. Another boat was purchased by the assessee in auction. Alter extensive repairs, this was also made seaworthy. These 10 boats were sold to parties in the Gulf States. The total value shown by the assessee was Rs. 1,49,150.00. Since the boats were being exported outside India, they had to go through the Customs Authorities. The Customs Collector fixed the export value of these boats at Rs. 2,44,650.00. Though the assessee objected to these valuations, he prepared fresh invoices at the rates fixed by the Customs Officer and exported them. The Income-tax Officer took the value of the boats at the sale price fixed by the Customs Authorities and the assessment was completed on a total income of Rs. 2,22,820.00, made up as hereunder: Business Rs. 2,21,618.30 Other sources Rs. 1,200.00 Total Rs. 818.00, i.e. Rs. 2,22,820 The Income-tax Officer held that the real sale price of the boats was the value fixed by the Customs Authorities and so added the difference in the sale value to die assesee's income. This assessment was confirmed in appeal and second appeal. In die meantime, the inspecting Assistant Commissioner of Income-tax initiated penalty proceedings for concealment of income and imposed a penalty of Rs. 21,000. We are concerned in this reference only with the penalty proceedings. 4. The learned counsel for the assessee relied upon the dictum contained in Commissioner of Income-tax v. Anwar Ali, 1970 (76) I.T.R. 696 to contend that the Department had not discharged die burden of proof that the amount in dispute constitutes his income. 21,000. We are concerned in this reference only with the penalty proceedings. 4. The learned counsel for the assessee relied upon the dictum contained in Commissioner of Income-tax v. Anwar Ali, 1970 (76) I.T.R. 696 to contend that the Department had not discharged die burden of proof that the amount in dispute constitutes his income. The principle is enunciated as follows: "The gist of the offence under section 28 (1) (c) is that the assessee has concealed the particulars of his income of deliberately furnished inaccurate particulars of such income and the burden is on the Department to establish that the receipt of the amount in dispute constitutes income of the assessee. If there is no evidence on the record except the explanation given by the assessee, which explanation has been found to be false, it does not follow that the receipt constitutes his taxable income. It would be perfectly legitimate to say that the mere fact that the explanation of the assessee is false does not necessarily give rise to the inference that the disputed amount represents income. Before penalty can be imposed the entirety of circumstances must reasonably point to the conclusion that the disputed amount represented income and that the assessee had consciously concealed the particulars of his income or had deliberately furnished inaccurate particulars". The principle enunciated in the above decision is that even though an assessee is assessed to a particular income the Department has to discharge the burden, in penalty proceedings that the assessee had in his hands the said income and that the assessment proceedings cannot be made the basis for such finding. The principle laid down in the above case is not of universal application. It has to be applied with reference to the facts of each case. We feel that the case on hand is easily distinguishable. 5. The question to be decided in this case is whether the Department acted rightly in relying upon the valuation fixed by the Customs Authorities in initiating penalty proceedings. The contention on the part of the assessee is that the Department had to discharge its burden independently and should not have relied solely on the valuation by the Customs Authorities. 6. According to us the Department has discharged its burden in this case. The contention on the part of the assessee is that the Department had to discharge its burden independently and should not have relied solely on the valuation by the Customs Authorities. 6. According to us the Department has discharged its burden in this case. It is admitted that the assessee returned his total income after the Customs Authorities fixed the value of the boats at Rs. 2,44,650. It is useful to remember that the assessee questioned the valuation fixed by the Customs Authorities up to the Supreme Court, but failed. At all material times therefore the assessee knew the value of the boats to be the one fixed by the Customs Authorities. His case that the contract price was much less, cannot be accepted for a moment. Nor can it be accepted that the purchasers outside, innocently agreed to send him the difference in price and that he kept such amount in the suspense account. A contracting party will never agree to a higher price under these circumstances. Thus it cannot be said, that the sole base on which the Department acted was the rejection of the explanation tendered by the assessee. The Department had sufficient materials for the action they took. We therefore hold that the burden had been satisfactorily discharged by the Department. 7. Anwar Ali's case was referred to and distinguished by a Division Bench of this Court, to which one of us was a party, in the decision reported in Subramonian Chettiar v. Commissioner of Income-tax, 1973 K.L.T. 243, It is laid down in that case as follows: "We have had occasion to deal with this aspect in a number of decisions and as fax as we can remember in all eases where the penalty has been imposed merely on the ground, that the Tribunal in the appeal from the assessment had found the explanation of the assessee in relation to a credit entry unsustainable, that by itself did not provide the base for the imposition of penalty. For the imposition of penalty a greater degree of proof was insisted upon and there must be clear finding on tin materials available that there has been a concealment of income or furnishing of inaccurate particulars thereof. For the imposition of penalty a greater degree of proof was insisted upon and there must be clear finding on tin materials available that there has been a concealment of income or furnishing of inaccurate particulars thereof. We have therefore to examine this case to find out whether the penalty in this case has been imposed merely on the basis of the rejection of the explanation of the assessee contained in the order of the Tribunal in the assessment proceedings or whether there was a finding that there has been a concealment of income. 8. The principle laid down m Anwar Ali case, was distinguished by the Supreme Court in a later decision reported in D. M. Manasvi v. Commissioner of Income-tax, 1972 (86) I.T.R. 557 . The Supreme Court observed: "On the basis of the dictum laid down in the above case, it is urged by Mr. Chagla that from the mere fact that the explanation of the assessee in the present case was found to be false it did not follow that the disputed amount represented his income and that the assessee had consciously concealed the particulars of his income or had deliberately furnished inaccurate particulars. In this respect we find that in the present case the inference that the assessee had consciously concealed the particulars of his income or had deliberately furnished inaccurate particulars is based not merely upon the falsity of the explanation given by the assessee. On the contrary, it is made amply clear by the order of the Tribunal that there was positive material to indicate that the business of Kohinoor Mills belonged to the assessee and the whole scheme was to distinguish the profits of the assessee as those of a firm of four partners. The present is not a case of inference from mere falsity of explanation given by the assessee, but a case wherein there are definite, findings that a device had been deliberately created by the assessee for the purpose of concealing his income. The assessee as such can derive no assistance from Anwar Ali case, [ 1970 (76) I.T.R. 696 ]. 9. Keeping in view the principles enunciated above, it can be safely said that the assessee furnished inaccurate particulars and had consequently concealed his income. The assessee as such can derive no assistance from Anwar Ali case, [ 1970 (76) I.T.R. 696 ]. 9. Keeping in view the principles enunciated above, it can be safely said that the assessee furnished inaccurate particulars and had consequently concealed his income. Adverting to this aspect of the case, the Tribunal observed as follows: "We are unable to see why an inference that the assessee deliberately furnished inaccurate particulars of income should not be drawn from the fact that the sum of Rs. 95,500 was screened from the knowledge of the Department till the assessee was confronted by the Income-tax Officer during examination of its accounts, that the Department found that it was taxable income and that finding was affirmed by me. Even otherwise, the word deliberate' was deleted from section 27 (1) (c) by the finance Act of 1964. The question whether the concealment was deliberate or otherwise is no longer a relevant consideration after the said amendment.'' The above finding of the Tribunal, we find, is based upon relevant material. The case put forward by the assessee that he had not concealed the income or that he did not furnish inaccurate particulars does not deserve any scrutiny. The materials on record clearly establish that the assessee had furnished inaccurate particulars. We accordingly answer the question referred to us in the affirmative that is in favour of the Department and against the assessee. The assessee will pay the costs of this reference, including Advocate's fee Rs. 250 to the Revenue. A copy of this judgment under the seal of the High Court and signature of the Registrar will be sent to the Income-tax Appellate Tribunal, Cochin Bench, as required by sub-section (1) of section 250 of the Income-tax Act, 1961.