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2015 (7) TMI 739 - ANDHRA PRADESH HIGH COURT

2015 (7) TMI 739 - ANDHRA PRADESH HIGH COURT - [2015] 377 ITR 417 (T&AP) - Penalty levied under Section 271(1)(c) - assessee made a wrong claim of business profits on purchase and sale of land as adventure and income warranting the said penalty - Held that:- In the facts of the present case and in the light of the guidance as provided by the Supreme Court in the case of Reliance Petro (2010 (3) TMI 80 - SUPREME COURT ), merely because the assessee made a claim which is not acceptable ipso facto .....

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ibunal dated 16.09.2014 in ITA No.1803/Hyd/2013 for the assessment year 2007-08, raising the following substantial question of law: In the facts and circumstances of the case, whether the order of the Honble Tribunal (ITAT) is not erroneous and perverse in law in cancelling the penalty levied under Section 271(1)(c) of the Income Tax Act, 1961, when the Respondent-assessee made a wrong claim of business profits on purchase and sale of land as adventure and income warranting the said penalty. 2. .....

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le of agricultural lands was negatived by the Assessing Officer and the same came to be confirmed even after the stage of Tribunal. In other words, the sum and substance of the learned Standing Counsels argument is that the intention on the part of the assessee to trade in agricultural lands by way of an adventure is established and stands uncontroverted and confirmed. Inasmuch as the assessee made a false claim and claimed exemption from taxation, the penalty proceedings are a natural corollary .....

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g of fact is perverse, thereby establishing the aspect of perversity. Whichever order which may ultimately be set aside by the appellate forum or the higher authority, basing on certain well settled legal principles, merely because the same was erroneous, need not be perverse or cannot be called as perverse. 4. In the facts of the present case, the Tribunal had recorded a finding in the penalty proceedings that the assessee had purchased agricultural lands and for a good number of years had offe .....

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claim made by the assessee cannot be said to be bona fide with the intention to evade the tax. Merely because the claim made by the assessee has not been accepted ipso facto, the said claim cannot be said to be a deliberate act of furnishing inaccurate particulars and it also cannot be said that the information furnished by the assessee is inaccurate inviting penalty. This issue of the matter is well settled by the judgment of the Supreme Court in CIT v. Reliance Petro Products (2010) 322 ITR 1 .....

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, there would be no question of inviting the penalty under s. 271(1)(c) of the Act. A mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such claim made in the return cannot amount to the inaccurate particulars. 5. In fact, the Tribunal had also taken into consideration of the law laid down by the Punjab & Haryana High Court in Sidhartha Enterprises 322 ITR 82, wherein it was held as .....

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