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2015 (7) TMI 562 - AT - Income TaxLevy of penalty u/s.271(1)(c) - assessee claimed that land to be of the nature of agricultural land as per sec 2(14)(iii) of the Act and accordingly the profit derived from its sale was claimed to be exempt and not liable to tax - Held that:- We find in the instant case the assessee sold certain land and treated the same as agricultural land which is beyond 8 kms from the local limits of municipality and treated such income as non taxable being exempt. We find during the course of assessment proceedings the AO on the basis of information gathered by him confronted the same to the assessee to which the assessee admitted her mistake vide letter dated 16-12-2008 and accepted that the said land in question cannot be treated as an agricultural land exempt from capital gain tax. The assessee also admitted that the land in question is within 8 kms of the Municipal limits. The fact remains that the land in question is not an agricultural land. As regards the other issue, i.e. the distance of the land from the PCMC is concerned, we find the Tribunal has already given a categorical finding that the land in question is within 8 kms from the PCMC as per the certificate given by the Asst. Director of Town Planning. The above certificate also remains unchallenged. The certificate produced by the assessee from the Talathi was also considered by the Tribunal and was rejected on the ground that it is general in nature and the certificate issued on the basis of local enquiry is not supported by any proper map. The Tribunal has further held that distance cannot be determined on the basis of local enquiries as mentioned by the “Kamgar Talathi” in his certificate. Thus, the land in question is neither agricultural land nor situated beyond a distance of 8 kms or more from the municipal area, i.e. PCMC herein question. As find from the various details furnished by the assessee in the paper book as well as the submissions made before the AO, CIT(A) and the Tribunal that the assessee has consciously and deliberately concealed her particulars of income and furnished inaccurate particulars of income arising out of the sale of land. Even the Tribunal in its order has also mentioned that the assessee has taken contradictory stand before the AO and the CIT(A) on this particular aspect. In our opinion, it is a clear case of concealment of income and a deliberate act of omission on the part of the assessee in filing the inaccurate particulars of income. The note given by the assessee in her computation statement will not absolve the assessee from the mischief of penalty u/s.271(1)(c) of the I.T. Act since it was very much known to the assessee that the land in question was neither agricultural land nor situated beyond a distance of 8 kms from the municipal limits. Therefore, the various decisions relied on by the Ld. Counsel for the assessee will not be of any help to the assessee. Had it been a bonafide mistake or bonafide omission or commission, the decisions would have been applicable but when the particulars given by the assessee consciously to defraud the revenue by not paying the legitimate tax due, the decisions will not come to the help of the assessee. Under these circumstances and in view of the detailed reasoning given by the CIT(A) upholding the levy of penalty we do not find any infirmity in the same. Accordingly, the order of the CIT(A) is upheld so far as the levy of penalty is concerned. - Decided against assessee. Quantum of penalty to be levied - submission of the assessee that since the profit has been held by the Tribunal to be of long term capital gain and not business income, therefore, the penalty should be restricted to the quantum of tax sought to be evaded - Held that:- As find merit in the above contention of the Ld. Counsel for the assessee. Since the tax on long term capital gain is lower than the tax on the business income, therefore, the penalty should be restricted to the tax sought to be evaded which in the instant case will be the tax sought to be evaded on the capital gain and not on business income. Since the Tribunal has already held that the income in question is long term capital gain, therefore, the tax sought to be evaded is on the long term capital gain which is lower than the tax computed by the AO on the business income. We therefore direct the AO to recompute the penalty treating the income as long term capital gain which has attained finality after the order of the Tribunal. We hold and direct accordingly. - Decided in favour of assessee.
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