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2016 (4) TMI 851 - ITAT CHENNAI

2016 (4) TMI 851 - ITAT CHENNAI - TMI - Penalty u/s 271(1)(c) - unexplained investment under section 69 - Held that:- From the facts of the case it is apparent that the assessee has agreed to purchase the land at ₹ 1,28,86,000/- as per sale agreement dated 15.03.2004. Subsequently, in the sale deed only ₹ 49,53,978/- is mentioned as the sale consideration. The assessee has explained before the Revenue that the difference between the amount ie., as per the sale agreement and the regis .....

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Tax (Appeals) for deleting the penalty. It is apparent from the transaction that the assessee has paid on-money of ₹ 79,32,020/-. The assessee has not come out with any reasonable explanation with cogent evidence to prove his case otherwise. Hence, it is evident from the transaction that additional investment made by the assessee amounting to ₹ 79,32,020/- has been concealed in the return of income filed by the assessee. Therefore, we hereby reinstate the order of the learned Assessi .....

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ved by the order of the learned Commissioner of Income Tax (Appeals)- IV, Chennai dated 01.08.2014 in ITA No.164/13-14 passed under section 271(1)(c) of the Act. 2. The only ground raised by the Revenue in its appeal is that the learned Commissioner of Income Tax (Appeals) has erred in deleting the penalty of ₹ 29,02,524/- levied by the learned Assessing Officer under section 271(1)(c) of the Act. 3. Brief facts of the case are that the assessee is engaged in the business of warehousing, h .....

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148 of the Act on 28.01.2010 and the assessment was completed under section 143(3) r.w.s 147 of the Act on 28.12.2010, wherein the learned Assessing Officer made addition of ₹ 79,32,016/- under section 69 of the Act being the difference in sale consideration disclosed in the return of income/sale deed and the actual sale consideration paid. Subsequently penalty proceedings were also initiated. During the course of search & seizure operation under section 132 of the Act on 10.01.2008 in .....

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onsideration as ₹ 49,53,978/-, therefore the difference between ₹ 1,28,86,000 and ₹ 49,53,978/- was treated as unexplained investment under section 69 of the Act for ₹ 79,32,016/-. Subsequently, the assessee accepted the addition of ₹ 79,32,016/- because the assessee could not produce the vendors and employees who assisted the company in purchasing the land. Because of the aforesaid reasons, the learned Assessing Officer levied minimum penalty worked at 100% tax sou .....

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a recent decision in the case of MAK Data (P) Ltd. v. CIT II (Civil Appeal No.9772/13 dated 30.10.2013) wherein the Hon'ble Apex Court has ruled after considering the Explanation to Section 271(1)(c) and held that the question would be whether the assessee had offered an explanation for concealment of particulars of income or furnished inaccurate particulars of income and the Explanation to Section 271(1)(c) raises a presumption of concealment and if a difference is noticed by the AO between .....

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ground that the consideration as per the agreement included future commitments for certain additional services such as enabling the purchase of an additional piece of land appurtenant to the subject land, which the vendors failed to carry out and hence no additional amount was actually paid. Further it has been mentioned that the agreement dated 15.4.2004 wherein the cash payment of ₹ 30,00,000/- was seen was payment made relating to F.Y. 2003-04 relevant to the A.Y. 2004-05 and the AR su .....

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receipt of 'on-money' for the immediately preceding A.Y. 5.3. Further, there is considerable merit in the AR's contention that once the onus cast on the assessee had been discharged as in the instant case, by way of giving cogent explanation which as stated earlier, was that the agreement to sell included future commitments for certain additional services such as enabling the purchase of an additional piece of land appurtenant to the subject land, which the vendors failed to carry o .....

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. There is again considerable merit in the AR's contention that beyond the contents of the registered deed no proof of actual payment was brought on record by the AO by way of summoning the vendors or recording their statement to verify whether they had actually received any unaccounted consideration. Further it is seen that the AO had also not proved the possible enhanced payment by way of 'on money' received recorded in the agreement of sale, by verification of sale instances of co .....

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ds. 5.6. Therefore it can be said that the onus, which had shifted on the Department, after the assessee had given an explanation for the difference between the amount mentioned in the registered deed and the sale agreement, had I not been adequately discharged by the AO in conclusively proving that there was concealment of income or furnishing inaccurate particulars of income and therefore the penalty imposed on the appellant is hereby directed to be deleted. 4. Before us, the learned Departmen .....

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