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M/s. Sai Venkata Associates, Pune Versus Asstt. Commissioner of Income Tax, Circle – 9, Pune

2015 (7) TMI 662 - ITAT PUNE

Disallowance of Development expenses - Held that:- It is evident from records that the compound wall was already in existence and there is no permanent structure or building on the land. The Assessing Officer visited the site to have first hand information and found that there is only a compound wall and small tin shed on the land under question. Thus, the claim of ₹ 3,26,500/- for fixing 30 light point, 15 plug point and 4 fan point etc. is not tenable. Even the enquiries made by Assessin .....

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de by the Assessing Officer revealed that most of the outstanding sundry creditors were paid by bearer cheques and in majority of the cases amount was withdrawn by one Shri Jaganan Thorat who is stated to be a close relative of one of the partners of the assessee firm. Since, the assessee was not able to substantiate the claim, the amount of ₹ 50,02,425/- was offered for tax.In the light of above facts, we do not find any infirmity in the order of Commissioner of Income Tax (Appeals) in co .....

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evenue, however, the persons who have issued the bills have not denied the issuance of bills. The Assessing Officer has rejected the bills on certain presumptions. Thus, in our view, there is no concealment of any information by the assessee. Thus it is not a fit case for levy of penalty for concealment of income or for furnishing inaccurate particulars of income - Decided in favour of assessee. - ITA Nos. 992 & 993/PN/2013 - Dated:- 10-7-2015 - Shri R.K. Panda and Shri Vikas Awasthy, JJ. For th .....

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he assessee has impugned the order of Commissioner of Income Tax (Appeals) in confirming levy of penalty of ₹ 17,00,324/- u/s. 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as the Act ). 2. The brief facts of the case as emanating from records are: The assessee is a partnership firm and is engaged in sale and purchase of land. The assessee filed its return of income for the assessment year 2008-09 on 13-10-2008 declaring total income of ₹ 18,70,183/-. The case of the .....

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the assessee claimed plot development expenses of ₹ 71,53,380/-. Out of the said development expenses, the assessee was not able to substantiate expenses to the tune of ₹ 50,02,425/-. The Assessing Officer disallowed the same. The Assessing Officer further recommended for initiating penalty proceedings u/s. 271(1)(c) against the assessee. Aggrieved by the assessment order, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals). The Commissioner of Income Ta .....

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impugning the orders of Commissioner of Income Tax (Appeals) confirming the disallowance, as well as, levy of penalty. ITA No. 993/PN/2013 3. First we will take up the quantum appeal of the assessee. 4. Shri Prayag Jha appearing on behalf of the assessee submitted that, the assessee had purchased a piece of land on 15-05-2007 for ₹ 2,25,00,000/- and sold the same vide sale deed dated 24-10-2007 for ₹ 3,17,00,000/-. The assessee had incurred expenditure to the tune of ₹ 71,53,3 .....

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,53,380/-. The Assessing Officer after examining the records, allowed development expenses of over ₹ 21.50 lacs. However, the Assessing Officer found that the expenses to the tune of ₹ 50,02,425/- were not genuine. Most of the bills raised for claiming expenses were hand written on plain paper. In most of the bills hand writing was same and were dated between 25th and 31st October, 2007 i.e. after the sale of land. The Assessing Officer himself visited the site to have first hand inf .....

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f assessee firm offered the amount of ₹ 50,02,425/- for tax. The ld. DR prayed for dismissing the appeal of the assessee. 6. We have heard the submissions made by the representatives of rival sides and have perused the orders of the authorities below. We have also examined the documents placed before us in the form of Paper Book. The assessee has purchased a plot of land on 15-05-2007 for ₹ 2,25,00,000/- and sold the same on 24-10-2007 for ₹ 3,17,00,000/-. The assessee claimed .....

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the bills were hand written on plain paper and were in same hand writing. The bills were dated between 25-10-2007 and 31-10-2007. The contention of the Revenue is that the bills were procured by the assessee subsequently. It was pointed out that the land was sold on 24-10-2007, whereas, the bills were dated between 25-10-2007 and 31-10-2007. The paper book filed before us contains deed of conveyance dated 24-10-2007 vide which the land was sold. The description of property sold is given in Sche .....

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nded as follows, i.e. On or towards the East by : Gat No. 70 & 72 On or towards the West by : Gat No. 74 On or towards the South by : Indrayani River On or towards the North by : Gat No. 76 SECONDLY: ALL THAT piece and parcel of Non agricultural land lying, being and situate at Village Karla within the limits of the Registration District of Pune and Registration Sub District of Maval and within the local limits of Zilla parishad Pune, Maval Taluka Panchayat Samiti and within the limits of Gr .....

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re as under: SCHEDULE OF THE PROPERTY (A) All that piece and parcel of Non Agri Land bearing Gut No. 73, admeasuring 00 H. 99 ares (9900 Sq. mtrs.) area and Gut No. 74, admeasuring 01 H. 01.8 ares, (10180 Sq. Mtrs) Total 20080 Sq. mtrs land situated at village Karla, Taluka Kaval, Dist Pune and within the limits of Zilla Parishad Pune Grampanchyat Karla and along with compound wall, well and trees, and it bounded as under:- ON OR TOWARDS THE EAST : Gut No. 72 ON OR TOWARDS THE WEST : Gut No. 75 .....

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d found that there is only a compound wall and small tin shed on the land under question. Thus, the claim of ₹ 3,26,500/- for fixing 30 light point, 15 plug point and 4 fan point etc. is not tenable. Even the enquiries made by Assessing Officer from the persons who have allegedly worked on the land does not infuse confidence, therefore, the same were disbelieved. Further, the Assessing Officer observed that most of the parties who had allegedly carried out development work were shown as su .....

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ssee firm. Since, the assessee was not able to substantiate the claim, the amount of ₹ 50,02,425/- was offered for tax. 8. In the light of above facts, we do not find any infirmity in the order of Commissioner of Income Tax (Appeals) in confirming disallowance. Accordingly, the appeal of the assessee is dismissed being devoid of merit. ITA No. 992/PN/2013 9. The assessee has filed appeal against the order of Commissioner of Income Tax (Appeals) confirming the levy of penalty u/s. 271(1)(c) .....

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ssment proceedings are primarily concerned with the quantification and computation of total income in accordance with the provisions of the Act. Penalty proceedings on the other hand, are primarily concerned with the conduct of the assessee. Penalty is imposed not because addition is made but because there is concealment or furnishing of inaccurate particulars by the assessee. New Holland Tractors (India) (P) Ltd. Vs. CIT : 275 CTR 291 (Delhi). The penalty can be levied where malafide is proved .....

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