TMI Blog2010 (4) TMI 846X X X X Extracts X X X X X X X X Extracts X X X X ..... Respondent. ORDER Abraham P. George, Accountant Member These are all appeals filed by the assessee. Whereas I. T. A. Nos. 1761 to 1765 of 2009 relating to the assessment years 2000-01 to 2004-05 are against a consolidated order dated August 5, 2009 of the Commissioner of Income-tax (Appeals), that for the assessment year 2005-06 numbered as 1766 of 2009 is against a separate order of the Commissioner of Income-tax (Appeals) dated even. All the appeals relate to penalty levied and confirmed on the assessee for the respective assessment years and since the fact situation giving rise to the levy of penalty is the same for all these years, these appeals are disposed of through a consolidated order. 2. The facts apropos as culled out from the orders of the lower authorities for the assessment year 2000-01 are as follows. There was a search and seizure on the premises of the assessee whose main business was developing housing plots and selling them. The assessee was doing this business by purchasing land, predominantly on the basis of powers of attorney, and thereafter incurring expenditure for developing such land for making it fit for sale. In the course of the search ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of search. It is immaterial whether sale is reflected subsequently and tax is paid. It is required that correct and true income should be shown in the return filed for each assessment year. The income of one year cannot be shifted in another year. The value of undisclosed stock should have been taken into account in computing of total income. By not doing so the assessee-company failed to disclose correct and accurate income for the relevant assessment year and in the process the payment of tax was avoided. The explanation given by the assessee regarding omission of undisclosed stock in computing total income is not satisfactory. Fact regarding undisclosed stock was known but the same was not disclosed in the return which cannot be unintentional. Co-operation in the course assessment proceedings by itself cannot absolve the assessee from imposition penalty. Now it is to be seen whether the assessee is entitled to immunity from penalty for his co-operation in the assessment proceedings. Co-operation and payment of tax on admitted income cannot absolve the assessee of penalty under section 271(1)(c) of the Act unless the case is covered by exceptions provided in Explanation 5 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clusion that the Assessing Officer was justified in levying penalty. 6. Now before us, the learned authorised representative submitted that land sold was always accounted, but based on a consistent policy adopted by the assessee, the value of the stock of such land was shown "nil" . Further as per learned counsel, none of these land was owned by the assessee or appearing in its name, but were held only as a part arrangement with the seller thereof, for developing such land. It was argued that as and when sales were effected, the margins that were available after paying of the purchase cost was fully reflected in its accounts. Since all the transactions were duly accounted, the learned authorised representative argued that escapement of income could not be presumed. In response to a question from the Bench, the learned authorised representative submitted that books were maintained, audit under section 44AB done and there were no comments on any discrepancy in the valuation of stock by the tax auditors at any point of time. In any case, according to him the value arrived at by the Assessing Officer was only on an estimate and therefore, there was no question of levy of penalty u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, but on the other hand it had only power of attorneys and by the Assessing Officer's own admission only a part of the payment was made by the assessee. There is no case for the Revenue that such part payments made were not accounted by the assessee. In such circumstances, having not made the payment of the full cost and also having not got itself registered as the owner, if the assessee came to a conclusion that such land need be shown at nil value, we cannot say that it was not a bona fide belief. The assessee of course, might have admitted during the course of search that stock value of land was not shown by it, and also agreed to show income based on valuations of land. But these would not mean that its earlier policy of not showing the value of the land at "nil" was not a bona fide one. Admittedly, there were no comments in the tax audit reports regarding any discrepancy in the valuation of stock of land for any of the years. Valuing the land simply based on the part payments made to prospective sellers, even before such purchases had fructified can never be considered a scientific method, but only an estimate. Just because the assessee had agreed to an addition out of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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