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2018 (7) TMI 2132 - ITAT DELHIValidity of SCN - Levy of penalty under section 271(1)(c) of the I.T. Act, 1961 - under which limb of Section 271(1)(c) of the I.T. Act, the penalty proceedings initiated, is not mentioned in the SCN - concealment of income/furnishing inaccurate particulars of income - Addition on account of deemed income - HELD THAT:- The show cause notice issued before levy of the penalty is bad in law as it did not specify under which limb of Section 271(1)(c) of the I.T. Act, the penalty proceedings under section 271(1)(c) of the Act had been initiated i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income - The issue is covered in favour of the assessee by the Judgment of the Hon’ble Karnataka High Court in the case of COMMISSIONER OF INCOME TAX, BANGALORE AND THE INCOME TAX OFFICER, WARD-6 (3) , BANGALORE VERSUS M/S SSA’S EMERALD MEADOWS [2015 (11) TMI 1620 - KARNATAKA HIGH COURT] and confirmed by Hon’ble Supreme Court in the case of COMMISSIONER OF INCOME TAX & ANR. VERSUS M/S SSA'S EMERALD MEADOWS [2016 (8) TMI 1145 - SC ORDER]. Therefore, the entire penalty proceedings under section 271(1)(c) of the Act are vitiated and penalty is liable to be cancelled. Addition on account of deemed income - HELD THAT:- The addition on account of purchases made at the lesser value of the Circle rate is introduced into the Act in Section 56(2)(vii)(b) w.e.f. 01.04.2014, which is applicable for the first time to the assessment year under appeal. The addition is made by the A.O. on account of deeming provisions. The A.O. has not brought any positive evidence on record to show that assessee has concealed the particulars of income or furnished inaccurate particulars of income - In the similar circumstances, in case of addition made under section 50C of the I.T. Act, the ITAT, Delhi-B Bench in the case of THE INCOME TAX OFFICER WARD-28 (4) , NEW DELHI VERSUS SHRI AJAY SHARMA [2017 (11) TMI 1909 - ITAT DELHI] confirmed the Order of the Ld. CIT(A) in cancelling the penalty. This is not a fit case for levy of the penalty - appeal allowed - decided in favor of assessee.
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