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2016 (9) TMI 1203 - AT - Income TaxPenalty u/s. 271(1)(c) - determination of liability - guilty of concealment of income - Held that:- Assessee was under a bona fide belief that ₹ 13 crores was a determined liability for A.Y. 2008-09 in accordance with the terms of the Full and Final Settlement Agreement dt. 22.02.2008 signed by him with the two companies. It was noted that he offered this amount for taxation in A.Y. 2009-10 under a bonafide belief that in accordance with the terms of Deed of Settlement recording the Consent Terms between the parties dt. 29.01.2009, this amount had become not payable and he accordingly, wrote back this amount in his books of accounts and paid taxes thereon in accordance with law. Thereafter, on professional advice, he has offered it for taxation in A.Y. 2008-09 and simultaneously, reduced it from his income for A.Y. 2009-10. Under these facts and circumstances, it is difficult to fault the assessee and accuse him of concealment of income. It is clear from the facts that the assessee had no intention whatsoever to conceal this amount of ₹ 13 crores. Even the dates of the two agreements entered into by the assessee with the companies on 22.02.2008 and 29.01.2009 go on to support his argument that his belief was bonafide initially, that this amount of ₹ 13 crores was a determined liability in A.Y. 2008-09 and became income in A.Y. 2009-10. In fact, the assessee paid taxes on this amount in A.Y. 2009-10 to the tune of ₹ 3,13,24,962/- on 27.09.2009. We find that Ld. CIT(A) in his impugned order has noted that the AO accepted the voluntary surrender of the assessee of an amount of ₹ 13 crores for A.Y. 2008-09 in his order u/s. 143(3) of the Act dt. 26.11.2010. Furthermore, the AO also accepted the assessee's revised return for A.Y. 2009-10, in the assessee had reduced his income by the said ₹ 13 crores vide his Order u/s. 143(3) of the Act dt. 20.12.2011. AO held the assessee is guilty of concealment of income of ₹ 13 crores for A.Y. 2008-09. The AO mentioned in the penalty order that the assessee had filed an appeal before CIT(A) against this addition. In fact, the assessee accepted this addition of ₹ 13 crores since he had voluntarily offered it for taxation for A.Y. 2008-09. In view of the above, Ld. CIT(A) has rightly held that that there is no case for imposition of penalty u/s. 271(1)(c) of the Act on the assessee with reference to the amount of ₹ 13 crores, hence, he rightly directed the AO not to impose any penalty u/s. 271(1)(c) with reference to this amount of ₹ 13 crores. - Decided in favour of assessee.
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