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2017 (8) TMI 1504 - AT - Income TaxPenalty u/s. 271(1)(c) - addition on receipt of on money consequent to dealing in land developing - AO in search proceedings considering the fact that the assessee may have paid some amounts in cash for making its purchases, the Assessing Officer opined to take net cash receipts in this case at 50% of the total sale consideration for the years under consideration - addition made by the AO by estimating on-money @ 50% of total consideration was deleted by the CIT(A)- defective notice Held that:- AO had recorded satisfaction of the assessee having concealed its income but where while levying penalty for concealment, the Assessing Officer held the assessee to have furnished inaccurate particulars of income and also concealed its income in para 5 and thereafter, in para 6 to have held that it has concealed income and in para 7, AO was satisfied that the assessee has furnished inaccurate particulars of income, the said order of Assessing Officer suffers from infirmities in not coming to the conclusion as to whether the assessee has concealed its income or furnished inaccurate particulars of income. Penalty for concealment is leviable in the case of assessee on satisfaction of one of the limbs, since the ultimate addition which has been sustained in the case of assessee is one. In the totality of the above said facts and circumstances, penalty order passed in the present case suffers from non-exercise of jurisdictional power of the Assessing Officer correctly and hence, the same is held to be invalid. - Decided in favour of assessee In assessment year 2008-09 AO had initiated penalty proceedings on that basis. Further, addition which has been made in the hands of assessee on account of evidence found and also on estimation of on-money. CIT(A) has totally changed the colour of addition though on account of on-money the addition made by the AO has been deleted and has been held to be unwarranted and further, the CIT(A) has directed assessment of on-money of ₹ 12 lakhs in assessment year 2007-08 instead of amount offered by the assessee in assessment year 2008-09 and had worked out the balance addition on account of on-money at ₹ 13,48,300/-. CIT(A) has changed the colour of addition, then it is incumbent upon the CIT(A) to initiate penalty proceedings. The order levying penalty passed by the Assessing Officer was no doubt on addition sustained by the CIT(A) but was on different basis. Further, the Assessing Officer had initiated penalty proceedings in the hands of assessee on an addition of ₹ 1,51,10,774/- for having concealed the income under section 271(1)(c) of the Act. The said addition has been struck down. No other satisfaction was recorded by the AO in respect of addition of ₹ 13,48,300/-. CIT(A) has also failed to record such satisfaction for initiating penalty proceedings. - Decided in favour of assessee.
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