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2011 (2) TMI 902 - ITAT DELHIPenalty under section 271(1)(c) - the assessee has not been able to substantiate as to why the rent for which the property was reasonably expected to be let from year to year was not admitted in the return of income - If the assessee had offered any income from security deposits it could have been argued for the purposes of penalty u/s 271(1)(c) that the assessee was under bonafide belief to admit income as per lease agreement though the income of the house property was to assessed as per the provisions of clause (a) of section 23(1) of the Act - The rent received was substantially undervalued because of huge interest free advance of Rs 67 crores received by the assessee which was diverted to sister concerns free of interest. The explanation that annual value of Rs 100000/- was evidenced by lease agreement cannot be considered as bonafide - Since the explanation offered by the assessee is neither substantiated nor shown to be bonafide, Explanation (1) to section 271(1)(c) would come into play and the assessee will be liable to penalty - Our view is supported by the decision of Hon'ble Delhi High Court in the case of Zoom Communication (P.) Ltd. (2010 -TMI - 75987 - DELHI HIGH COURT) -In view of above discussion in our considered opinion ld CIT(A) was justified to confirm penalty u/s 271(1) of the Act.
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