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2019 (1) TMI 655 - HC - Income TaxPenalty u/s 271(1)(c) - Failure to furnish returns, comply with notices, concealment of income - disallowance of expenses - Held that:- On the question of full and true disclosure, we would like to refer the accounts of the appellant-assessee that were audited. The audit report placed on record had stated that the appellant-assessee had recognized revenue from the projects based on PoC Method in relation to sold areas on the basis of percentage of actual construction and other related costs incurred thereon excluding land cost as against the total estimated cost of the project under execution subject to such actual cost being 30% or more of the total estimated cost. Similarly, there were disclosures under the heading 'inventory and cost of construction/development' to the effect that 'work in progress' was valued at lower of the cost than net realizable value, cost of pricing of land including development rights, material services and other overheads. Costs of construction/development incurred would be discharged to the profit and loss accounts proportionate to the project area sold, in cases where threshold of 30% had been exceeded. Full details with regard to the expenses claimed under selling, administrative and another expenses had been disclosed. As noticed above, the figures given in columns and heads have not been disturbed by the Assessing Officer and no addition has been made by doubting and disturbing the figures and amounts mentioned. The Tribunal has also not stated that full and complete disclosure of material facts was not made by the appellant-assessee. Given the aforesaid facts, i.e. the relevant clauses of AS-7, applicable Guidance Notes, the fact that the accounts were duly audited and the disclosures made in the audit notes, the loss income as declared, small taxable income as assessed even after the additions were made and that the expenses as claimed were otherwise eligible and allowed in the next assessment year, we would accept that the appellant-assessee had shown that they had acted bonafidely. Thus, the appellant-assessee should not have been burdened with penalty for concealment of income under Section 271(1)(c) of the Act. - decided in favour of assessee.
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