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2015 (11) TMI 569 - ITAT AHMEDABAD

2015 (11) TMI 569 - ITAT AHMEDABAD - TMI - Penalty under section 271(1)(c) - assessee failed to substantiate its claim of agriculture income with the help of supporting evidence - Held that:- The land revenue record maintained by the State Government, it has been shown as owner in possession of land admeasuring 3,92,714 sq.meters, which is roughly 170 acres. In the column of cultivator, name of the assessee-company has been recorded. The assessee has produced land record from the revenue authori .....

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ting evidence. But the claim was not found to be false, because the assessee is the owner and in possession of huge tract of agriculture land. The income of the assessee has been estimated. The AO cold have estimated the generation of agriculture income to this extent, out of such huge tract of agriculture land. Therefore, to our mind, the assessee does not deserve to be visited with the penalty under section 271(1)(c) of the Act, and we delete penalty - Decided in favour of assessee. - IT(SS)A .....

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7; 48,685/-, ₹ 30,987/-, ₹ 65,640/-, ₹ 80,863/-, ₹ 67,320 and ₹ 1,00,980 in the Asstt.Years 2001-02 to 2007-08 respectively. 3. The learned counsel for the assessee has filed an application for adjournment. However, after going through the adjournment application as well as case record, we do not see any reason to adjourn the hearing. 4. With the assistance of the ld. DR, we have gone through the record carefully and proceed to dispose of the appeals ex parte qua th .....

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various documents and books of accounts were found and seized. At the premises of Shri Bholabhai V. Patel certain documents were found exhibiting the escapement of income in the hands of the assessee. Therefore, after recording satisfaction, incriminating materials were transmitted to the AO having jurisdiction over the assessee. The AO had issued notice under section 153C r.w.s. 153A(1)(b). In response to this notice, it was contended by the assessee that the returns filed by it under section .....

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e of ₹ 1,16,300/-, ₹ 1,21,200/-, ₹ 90,705/-, ₹ 90,705, ₹ 2,20,884/-, ₹ 2,00,000/- and ₹ 3,00,000/- for the Asstt.Years 2001-02 to 2007-08 respectively. The AO has assessed these amounts as income from other sources by disbelieving the claim of the assessee under the head agriculture income. According to the AO, the assessee failed to produce any evidence demonstrating the agricultural operation carried out by it in the land. 7. The ld.AO has initiated pe .....

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mply under the vague term that the assessee has committed a default under section 271(1)(c) of the Act. He imposed penalty of ₹ 45,965/-, ₹ 48,685/-, ₹ 30,987/-, ₹ 65,640/-, ₹ 80,863/-, ₹ 67,320 and ₹ 1,00,980 in the Asstt.Years 2001-02 to 2007-08 respectively. 9. Appeal to the CIT(A) did not bring any relief to the assessee. 10. On perusal of the impugned orders, we find that the assessee has contended before the AO as under: 1. The additions are estima .....

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d, relied upon the orders of the Revenue authorities below. She contended that the assessee failed to furnish any evidence on the record demonstrating the fact that it has carried out agricultural operations on the land owned by it. The AO has rightly disbelieved its claim for exemption from taxation of the income shown under the head Agriculture Income . 12. We have considered the submissions of the ld. DR and gone through the record. Section 271(1)(c) of the Act has a direct bearing on the con .....

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ases referred to in Clause (c) or Clause (d), in addition to tax, if any, payable by him, a sum which shall not be less than, but which shall not exceed three times, the amount of tax sought to be evaded by reason of the concealment of particulars of his income or fringe benefit the furnishing of inaccurate particulars of such income or fringe benefits: Explanation 1- Where in respect of any facts material to the computation of the total income of any person under this Act, (A) Such person fails .....

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f shall, for the purposes of Clause (c) of this sub-section, be deemed to represent the income in respect of which particulars have been concealed." 13. A bare perusal of this section would reveal that for visiting any assessee with the penalty, the Assessing Officer or the Learned CIT(Appeals) during the course of any proceedings before them should be satisfied, that the assessee has; (i) concealed his income or furnished inaccurate particulars of income. As far as the quantification of th .....

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ing anything to indicate so, statutory deeming fiction for concealment of income comes into play. This deeming fiction, by way of Explanation-1 to section 271(1)(c) postulates two situations; (a) first whether in respect of any facts material to the computation of the total income under the provisions of the Act, the assessee fails to offer an explanation or the explanation offered by the assessee is found to be false by the Assessing Officer or Learned CIT(Appeal); and, (b) where in respect of .....

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total income or by action of the Assessing Officer or the Learned CIT(Appeals) by giving a categorical finding to the effect that explanation given by the assessee is false. In the second situation, the deeming fiction would come to play by the failure of the assessee to substantiate his explanation in respect of any fact material to the computation of total income and in addition to this the assessee is not able to prove that such explanation was given bona fide and all the facts relating to t .....

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