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2014 (8) TMI 1160 - ITAT PUNEPenalty u/s 271(1)(c) - addition in respect of interest on fixed deposits with bank - Held that:- We are unable to approve the stand of the Revenue that the said income has been detected by the Assessing Officer before its declaration by the assessee. No doubt, it was not declared in the return of income but was declared by way of a revised computation of income filed during the assessment proceedings. Every mistake or omission does not ipso facto lead to levy of penalty u/s 271(1)(c) of the Act. In so far as the present issue is concerned, the overall circumstances explained by the learned counsel before us, in our view, mitigate the rigors of section 271(1)(c) of the Act qua the impugned sum of ₹ 4,60,091/-. Therefore, we set-aside the order of the CIT(A) on this aspect and direct the Assessing Officer to delete the penalty levied with respect to the addition at ₹ 4,60,091/- on account of interest on FDRs with Dena bank. Addition on account of land as short term capital gain - Held that:- The ingredients necessary to impose penalty u/s 271(1)(c) of the Act qua the impugned transaction are fulfilled. In the present case, it is quite evident that the transaction resulting in short term capital gain on sale of Pirangut property was not declared in the return of income filed. It is also clear 7 that the purchase as well as sale of the property is by way of duly executed conveyance deeds and therefore it is not a case where assessee was not aware of the income accruing to her on account of the impugned transactions. Considering the totality of facts and in the absence of any plausible and bonafide explanation coming-forth from the assessee, we find that the said income has been rightly subjected to levy of penalty u/s 271(1)(c) of the Act. We hereby affirm the orders of the authorities below on this aspect. Income by way of TDR sale receipts - Held that:- For addition on account of sale of TDR it is not in dispute that the same reflects a transaction undertaken by assessee’s late husband Satish D. Misal prior to his death in the year 2003. It is quite evident that assessee was not a party to the transaction and that she is in receipt of money as legal heir of her deceased husband -merely because an assessee has agreed to an addition, cannot be conclusive for the purpose of penalty u/s 271(1)(c) of the Act. Quite clearly, it is a trite law that assessment proceedings and the penalty proceedings are independent proceedings and that the findings in the assessment proceedings are not conclusive for the purposes of adjudicating the levy of penalty although such findings may be relevant for the purposes of 10 penalty proceedings. In-fact, as per case of Anantharam Veerasingaiah & Co. vs. CIT [1980 (4) TMI 2 - SUPREME COURT] penalty proceedings are independent of the assessment proceedings and penalty cannot be levied merely on the basis of the findings in the assessment proceedings. Penalty u/s 271(1)(c) of the Act is not attracted - Decided in favour of assessee.
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