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2015 (4) TMI 4 - AT - Income TaxPenalty under section 271(1)(c) - income surrendered at ₹ 45 lakhs and addition in respect of Rahon Road Property in a sale of ₹ 1,38,750 - CIT(A) cancelled penalty levy - Held that:- It is clear that all the facts of surrendered income and actual surrender of ₹ 45 lakhs and payment of tax thereon were within the knowledge of the Revenue Department and were in fact disclosed by the assessee to the Revenue Department prior to the order sheet dated December 24, 2008. It appears to be inadvertent mistake on the part of the assessee in not mentioning ₹ 45 lakhs in the original return of income, therefore, the decision in the case of Price Waterhouse Coopers P. Ltd. v. CIT [2012 (9) TMI 775 - SUPREME COURT] squarely applied in favour of the assessee. The assessee thus would be entitled for benefit of Explanation 5(2) to section 271(1)(c) of the Income-tax Act. The decisions cited by the learned Departmental representative are, therefore, clearly distinguishable on facts because the Assessing Officer did not detect anything on or before December 24, 2008 because every fact was disclosed to the Revenue Department and within the knowledge of the Assessing Officer. In view of the above discussion, we do not find any infirmity in the order of the learned Commissioner of Income-tax (Appeals) and delete the penalty with regard to the surrender of ₹ 45 lakhs. As regards the levy of penalty on account of sale of property to Rahon Road, Ludhiana, the main reason for levy of penalty was that assessee disclosed lower rates of plots but the same was not supported by any reasons by the Assessing Officer for taking higher valuation. The learned Departmental representative admitted that no material or evidence was found during the course of search to support the findings of the Assessing Officer that assessee has concealed any higher sale consideration. The assessee in support of the sale consideration had filed sale deeds which have not been rebutted through any evidence. The assessee did not maintain regular books of account, and therefore, provisions of section 145(3) were applied and the rates were enhanced by the Assessing Officer for making estimated addition of ₹ 1,38,750. It is well settled law that for an estimated addition, no penalty is leviable. The particulars of sale of plots were also disclosed in the return of income filed by the assessee. The hon'ble Madras High Court in the case of CIT v. K. R. Chinni Krishna Chetty [1998 (6) TMI 5 - MADRAS High Court] held that (catchwords) "Mere revision of income to a higher figure by assessing authority does not automatically warrant inference of concealment of income". - Decided in favour of assessee.
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