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2005 (12) TMI 83 - HC - Income TaxPenalty levied u/s 271(1)(c) - concealment of particulars Or furnished inaccurate particulars of income - HELD THAT:- The expression used in clause (2) of Explanation 5 is not confined to physical possession but extends to type of possession which is capable of being held. In case the property is an actionable claim it can be possessed by way of possessing the right to recover such asset by exercise of such right. When such loan is represented by promissory note, it could give rise to presumption that money represented by promissory notes belong to the person as held by the person in whose favour the promissory note has been executed. If on that basis the assessee could be held owner of the debt represented by the promissory notes he cannot be deemed to be in possession of such actionable claim, an asset of the assessee. Thus, the view propounded by the Assessing Officer and now pursued by the Revenue by drawing distinction between possession of tangible and intangible assets is unsustainable. In fact it was never the case of the Revenue that the assessee had not complied with the requirement of Explanation 5 to section 271, except that no statement about undisclosed income could be made u/s 132(4), it applies only to the declaration of undisclosed tangible assets. This clearly was erroneous in view of a combined reading of section 132(4) and Explanation 5 to section 271. Hence, the conclusion of the Tribunal cannot be said to be erroneous. Thus, CIT (A) and the Tribunal were justified that the penalty was not for concealment of particulars and no penalty is leviable in view of specific Explanation 5 to section 271(1)(c) of the Act and cannot be interfered. It may also be noticed that in the case of Amarchand Soni the same view was expressed. Amarchand Soni had also resorted to K.V.S. Scheme, 1998, that has further strengthened his case and the appeal of the Revenue in his case was dismissed. We do not find any force in this appeal and the same is hereby dismissed.
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