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2016 (3) TMI 817 - ITAT AGARA

2016 (3) TMI 817 - ITAT AGARA - TMI - Penalty u/s 271(1) (C) - difference of surrendered and returned Income - unexplained investment in house property - Held that:- The surrender had been based on an estimate made by the assessee which was restricted to the extent of value calculated after getting the proper valuation done by the registered valuer. In such circumstances the assessee was well within his limits to have harbored a belief that the correct value of investment in the house property w .....

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aving not furnished any inaccurate particulars of income, levy of penalty under section 271(1)(c) is uncalled for and ought to be dismissed. - Decided in favour of assessee - ITA No.63/Ag/2014 - Dated:- 9-2-2016 - SHRI BHAVNESH SAINI , JUDICIAL MEMBER AND MS. ANNAPURNA MEHROTRA, ACCOUNTANT MEMBER For The Appellant : Sh. Mahesh Agrawal For The Respondent : Sh. Waseem Arshad ORDER PER ANNAPURNA MEHROTRA A.M. This appeal has been filed by the assessee against the order passed by the Ld. CIT(A) Gwal .....

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ional High Court and Judgment of Hon ble Supreme Court of India Where it has been held that surrendered Income is not a undisclosed income of assessee. 3. Brief facts relating to the case are that return of income was filed on 31/03/2007 declaring total income of ₹ 17,23,442/-. A survey under section 133A was conducted on 10/11/2015, and the assesssee was found to be in possession of unaccounted cash, unrecorded stock and unexplained investment in construction of house property. While reco .....

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valuer. 4. During the course of assessment proceedings the investment in the construction of house property was worked out at ₹ 19,21,550/- wherefrom ₹ 4,86,910/- was reduced on account of explained investment and balance amount of ₹ 14,34,640/- was added to the total income of the assessee as against ₹ 9,71,090/- disclosed by the assessee in the return of income. The assessee preferred an appeal against the above assessment order where in the Ld. CIT(A) restricted the ad .....

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to ₹ 1,09,500/-. The assessee had furnished inaccurate particulars of income and therefore levied penalty under section 271(1)(c). The matter was carried in appeal before Ld. CIT(A) before whom the assessee argued that there no concealment of income since less figure of investment in house property was taken on the basis of the report of a chartered engineer. The assessee further stated that merely because surrender had been made by the assessee did not mean that the assessee had undisclo .....

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y cited some case laws. These case laws have been given on different set of facts and are not applicable in the case of the appellant. The appellant has not disputed the fact that the assessee has shown his income on account of unexplained investment in construction of house at ₹ 9,71,090/- in place of the correct amount of ₹ 10,80,590/-. As the assessee has concealed particulars of his income under the head unexplained investment in the construction of house, therefore, I am of the .....

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course of survey on account of unexplained investment in house property but later on when it had got the cost of construction in house property valued by a registered valuer he found that the investment in the construction of house property amounted to only ₹ 9,71,090/- and accordingly reduced the undisclosed investment in house property. Ld.AR stated that there was no furnishing of inaccurate particulars of income in this case since the investment in construction of house property had be .....

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ly to the second statement recorded on 10/11/2005 wherein reply to Question No. 3. The assessee had stated the investment made in house property and the amount of undisclosed investment is the same. Question no. 3 & its reply is reproduced here under: Referring to the same Ld. AR stated that it is clear from the above that the assessee had estimated the investment in house property at 15,67,500/- by applying a rate of ₹ 350/- to ₹ 300/- to the area constructed on the different fl .....

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AR therefore submitted that having thereafter determined the valuation of construction on the basis of the registered valuer report and disclosing the undisclosed investment in house property on the basis of its report it could not be said that the assessee had furnished any inaccurate particulars of income, so as to make it a fit case for levy of penalty under section 271(1)(c). 8. Ld. DR on the other hand relied upon the order of Ld. AO/CIT(A) and held that by not disclosing the amount surrend .....

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t in construction of house property. The unexplained investment had been worked out as the total investment in house property was taken at ₹ 15,67,500/- against which the disclosed investment was shown of ₹ 4,86,910/- resulting in unexplained investment of ₹ 10,80,590/-. Thereafter the assessee engaged the services of registered valuer for estimating the cost of construction in the impugned property who worked out a total investment in the property at ₹ 14,58,000/-. Relyi .....

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of the assessee. Penalty u/s 271(1)(c)has been levied on this amount. In the back drop of the facts stated above, it has to be examined whether the assessees case falls within the parameters set out under section 271(1)(c) for the levy of penalty. Undisputedly penalty under section 271(1)(c) is levied for concealing particulars of income or furnishing inaccurate particulars of income. In the present case as per the penalty order, the penalty has been levied for furnishing inaccurate particulars .....

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