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2015 (6) TMI 386 - ITAT AHMEDABAD

2015 (6) TMI 386 - ITAT AHMEDABAD - TMI - Penalty under section 271(1)(c) - inaccurate particulars of income in respect of “on money’’ received from each member for booking 108 flats - Held that:- No inaccuracy in the particulars of income of ₹ 7.80 crores being "on money" could be established by the Assessing Officer by bringing on record any relevant material.

The amount of income and the nature of income as disclosed by the assessee was accepted by the Assessing Officer on as .....

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ction 271(1)(c) can be levied only for either concealment of income or for furnishing inaccurate particulars of income. Therefore, the Commissioner of Income-tax (Appeals) was not justified in confirming above levy of penalty.

Further explanation 4 to section 271(1)(c) explains the procedure to calculate the quantum of tax sought to be evaded and therefore, in a case where returned income and assessed income are same, no penalty under section 271(1)(c) can be levied with the help of p .....

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the levy of penalty under section 271(1)(c) of the I.T. Act, of ₹ 2,41,02,000/- made by the AO. 2. The brief facts of the case are that a search action was carried out u/s 132 of Income-tax Act, 1961 on 6.1.2011 in the case of Savalia Group, residential premise of Shri Maganbhai H. Bhakhar situated 86/1, H. Colony, Nehrunagar Char Rasta, Ambawadi. In the statement recorded on 6.1.2011 & 7.1.2011 under section 132(4) of the Act, Shri Maganbhai H. Bhakhar admitted an amount of ₹ 7, .....

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f assessment proceedings the assessee was required to provide the details of on money received from each member for booking 108 flats. The assessee failed to provide this information and, therefore, penalty proceedings were initiated under section 271(1)(c) of the Act for submitting inaccurate particulars of income. In the penalty order the AO observed that the core issue in the case of the assessee was what constitutes concealment of particulars of income or furnishing inaccurate particulars of .....

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e is earned and did not provide the Department with true and correct particulars of income and, therefore, he was satisfied that the assessee has concealed particulars of its income and furnished inaccurate particulars of its income and was liable for penalty u/s 271(1)(c) of the Act and accordingly he levied penalty of ₹ 2,41,02,000/- being 100% of the tax evaded. 4. On appeal the CIT(A) confirmed the action of the AO by observing that it was the duty of the assessee to record all his tra .....

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the assessee failed to show true and correct income in the books of account maintained. The CIT(A) also observed that the AO levied the penalty under sub-clause (c) of explanation 4 to section 271(1)(c) of the Act which provides that expression of amount of tax sought to be evaded means the difference between the tax on the total income assessed and the tax that would have been chargeable had such total income been reduced by the amount of income in respect of which particulars have been concea .....

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ry same income at which the return was filed by the assessee i.e.7,81,17,510/- It was, therefore, the submission that there was no concealment of income by the assessee with respect to the return of income filed by the assessee and hence was not liable to penalty. It was further submitted that confirmation of the impugned penalty by the CIT(A) under explanation 4 to section 271(1)(c) of the Act was totally illegal for the simple reason that the aforesaid explanation 4 is only a procedural or mac .....

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Act authorizes imposition of penalty when the Assessing Officer is satisfied that the assessee had either concealed particulars of his income or furnished inaccurate particulars of such income. It was not a case of furnishing inaccurate particulars of income, as in the Income-tax return, particulars of income had been duly furnished and the surrendered amount was duly reflected in the return. The question whether the particulars of income were concealed by the assessee or not would depend upon w .....

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satisfaction during the course of survey. The decision to initiate penalty proceedings was taken while making the assessment order. Thus, the expression in the course of any proceedings under this Act could not have the reference to servey proceedings, in this case. The concealment of particulars of income or furnishing of inaccurate particulars of income by the assessee had to be in the return filed by it. No penalty could be imposed unless the conditions stipulated in the provisions were duly .....

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a complete disclosure in the return and offered the surrendered amount for the purposes of tax. 8. On the other hand, the ld. DR relied on the order of ld. CIT(A). 9. We have heard the rival submissions and perused the orders of the lower authorities and materials available on record. In the instant case the Assessing Officer levied penalty of ₹ 2,41,02,000/- on the ground of furnishing of inaccurate particulars of income in respect of on money of ₹ 7.80 crores. The relevant factors .....

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e of ₹ 7,81,17,501/-. Thus there was no difference in the returned income and assessed income. 11. According to the Assessing Officer the assessee could not furnish names of the persons from whom on money was received and therefore he considered the particulars of income of on money as inaccurate and therefore levied penalty under section 271(1)(c). 12. On appeal Commissioner of Income-tax (Appeals) confirmed the above levy of penalty. 13. We find that in the instant case penalty has not b .....

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by the Assessing Officer. The case of the Assessing Officer is that further more details in respect of the income which was desired by the Assessing Officer could not be furnished by the assessee and therefore for this failure of the assessee he levied penalty under section 271(1)(c) of the Act. In our considered view for such a failure penalty under section 271(1)(c) cannot be levied. Penalty under section 271(1)(c) can be levied only for either concealment of income or for furnishing inaccurat .....

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