( 1 ) THE question referred to us in this case is:"whether on the facts and circusmtances of the case, the imposition of the penalty of Rs. 4,000. 00 was justified under S. 28 (1) (c) of the Act?"

( 2 ) THE assessee is described as a firm of Military contractor doing business at Tradepalligudem, West Godavari District. For the assessment year 1944-45, the firm returned an income of Rs. 19,639. 00 on the basis of their accounts. The Income-tax Officer called for their accounts. The Income-tax Officer called for their accounts and on examination found that they were defective. So rejecting their estimate, he added a sum of Rs. 54,455. 00 to the income returned. There was an appeal to the Appellate Assistant Commissioiner and a further appeal to the Income Tax Appellate Tribunal, as a result of which the sum to be added was resulted to Rs. 35,354. 00. Three reasons for rejecting the account books were assigned by the Income Tax Authorities: (1) There was evidence that out of the coal supplied by the Government to enable the assessee to perform a contract, the assessee sold to a private to perform a contract, the assessee sold to a private party the two waggon loads of coal for Rs,1,000

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