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2017 (3) TMI 1179 - AT - Income TaxLevy of penalty under section 271(1)(c) - development of the property could not be completed and consequently the same could not be transferred, merely because the assessee had offered the cash component as income in his hands in the year under appeal - Held that:- Where the assessee had entered into a development agreement but the same could not be completed because of the dispute between the parties, though the capital gains on the amounts received in assessment year 2006-07 has been offered to tax, but the possession and the retention of the property by the assessee establishes the case of assessee that there is no transfer and the transaction has not been completed till date. The Talati vide order dated 19-04-2010 has also acknowledged that the properties owned by the assessee and the co-owners is under attachment to the Commissioner of Income Tax. In such circumstances, we find no merit in levying penalty and holding the assessee to have concealed the income under section 271(1)(c) of the Act. The operation of Explanation 5 to section 271(1)(c) of the Act was limited to any money, bullion, jewellery or other valuable articles or thing, found during the course of search and where the assessee claims that It was acquired by him by utilizing his income, then conditions are provided therein, to hold, whether the assessee is liable to levy of penalty for concealment or not. The Explanation 5 to section 271(1)(c) of the Act is silent about the working of income on the basis of any books of account or other documents found during the course of search which represent the income of the person searched for any previous years. In the absence of same and where the sole basis for the addition in the hands of assessee is the document found during the course of search and admittedly no cash being found, then Explanation 5 to section 271(1)(c) of the Act is not attracted. We hold so and delete the penalty levied under section 271(1)(c) of the Act on this alternate plea also. - Decided in favour of assessee
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