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2016 (1) TMI 708 - AT - Income TaxPenalty u/s 271(1)(c) - disallowance of agricultural income - CIT(A) deleted the penalty - Held that:- It is an undisputed fact that the assessee has claimed any expenditure having incurred for carrying out the agricultural operation for earning agricultural income. During the course of assessment proceedings, the assessee was not able to produce any evidence of having engaged in agricultural activities and agreed to offer the said income for taxation. Once the assessee has agreed to pay tax for the said income, the income so declared by the assessee under the head “Agricultural Income” has no locus standi and it is nothing but undisclosed income under section 68 of the Act claimed under the head “Agricultural Income” to evade tax. Any evidence furnished for having carried out agricultural operation by incurring any expenditure, the income so earned shall be treated as “Agricultural Income”, which is exempt under the Act. In the present case, the assessee has not admitted any gross agricultural income showing expenses towards earning of such agricultural income and agreed to pay tax. CIT(A) has failed to consider the facts in proper perspective and accordingly, we confirm the penalty levied by the Assessing Officer - Decided against assessee Levy of penalty for the disallowance of development liability - CIT(A) deleted the penalty - Held that:- In the present case, the assessee has made an erroneous claim of deduction, which indeed pointed out by the Assessing Officer during the course of 147 assessment proceedings and the assessee has not given proper explanation. Therefore, the claim was added back to the returned income of the assessee. It is not the case that the assessee has furnished true particulars of income in the returned filed by the assessee. Therefore, the decision of the Hon’ble Supreme Court in the case of Mak Data P. Ltd., vs. CIT (supra) relied on by the Department in the grounds of appeal squarely applies to the facts of the present case in hand. Accordingly, we find that there is no illegality in initiating penalty proceedings. In view of the above, we set aside the order passed by the ld. CIT(A) and confirm the penalty levied by the Assessing Officer.- Decided against assessee
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