Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2017 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (5) TMI 1037 - AT - Income TaxPenalty under Section 271(1)(c) - addition on account of unexplained expenses for earning agricultural income - Held that:- Nowhere any details filed by the assessee has been held to be incorrect by the lower authorities with the support of any evidence which can show that the assessee has concealed any particulars of income or furnished inaccurate particulars of income. It is evident that if an assessee who is holding agricultural land and has earned income and if such net agricultural income is not disputed, then certainly some expenses must have been incurred to earn the agricultural income. It is well known fact that the agriculturists are not so well-versed in keeping the regular accounting of day-to-day expenses of agricultural operations, but that does not mean that the expenses have not been incurred. In the case of assessee for all the three assessment years, an ad-hoc disallowance has been made by AO and some relief has been granted by the ld. CIT(A). Certainly, in these circumstances, assessee do not deserve to be visited with penalty under Section 271(1)(c) for concealment of particulars of income or furnishing of inaccurate particulars of income. We accordingly delete the penalty imposed under Section 271(1)(c) for all the three years calculated on the sustained addition on account of unexplained expenses for earning agricultural income. Unaccounted profit/unexplained investment in share business - Held that:- Most of the additions which have been scaled down by the CIT(A) were on the basis of verification of bank statement showing amount received from other parties which were enough to cover the unaccounted investment. In these total series of facts, there is no firm conclusion drawn by the AO in order to satisfy the conditions for imposing penalty under Section 271(1)(c). We are, therefore, of the considered view that the assessee, in the given case, has furnished details which were mostly found correct by ld. CIT(A) and the additions of concealed income was mainly made on hypothetical basis and also not firmly concluded by giving set off of the loss in share trading business appearing in the seized documents. We are, therefore, of the view that the penalty imposed under Section 271(1)(c) of the Act on the sustained additions for AYs 2004-05 and 2009-10 related to unaccounted profit and unexplained investment at ₹ 5,00,000/- and ₹ 6,50,000/- respectively need to be deleted. We order accordingly. Penalty u/s 271AAA(2) - Held that:- It is well established that the AO has not taken the basis of undisclosed income surrendered during the course of search a ₹ 25,00,000/- as the basis for computing the penalty under Section 271AAA of the Act. He has rather taken the basis of sustained addition of ₹ 2,93,000/-. Once the Assessing Officer has missed the starting point provided in Section 271AAA(2) of the Act relating to admission of undisclosed income under Section 132(4) of the Act, then the amount disclosed by the assessee in the return of income should be taken as basis. In the case of assessee, the assessee has admitted to have earned unaccounted commission income during the course of search proceedings and has declared ₹ 3,00,000/- has commission earned from the land deal specified above and has paid due taxes along with interest, then in our considered view, as he has satisfied all the three conditions of Section 271AAA(2) then he does not deserve to be visited with penalty under Section 271AAA of the Act at ₹ 29,300/-. We accordingly delete the same. In the result, this appeal of the assessee is also allowed.
|