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M/s. B.K. Concast Pvt. Ltd. Versus DCIT, Circle 2 (1) , New Delhi

2016 (5) TMI 484 - ITAT DELHI

Penalty u/s 271(1)(c) - excess cost of acquisition claim of the assessee - Held that:- the assessee has neither furnished inaccurate particulars of income nor he has concealed the particulars of income from tax authorities, because the assessee has merely enhanced the cost of acquisition of the land for the purpose of computation of income stated to be due to inadvertent mistake, which he has subsequently revised and paid the tax on the remaining amount. In our view, this is a case of mere cleri .....

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return are found to be incorrect or erroneous or false and in these circumstances, penalty u/s 271(1)(c) of the Act is not sustainable. - Decided in favour of assessee. - ITA No. 800/Del./2015 - Dated:- 29-4-2016 - Shri N. K. Saini, Accountant Member And Shri Kuldip Singh, Judicial Member For the Petitioner : Shri Sanjay Malik, Advocate For the Respondent : Shri K.K. Jaiswal, DR ORDER Per Kuldip Singh, Judicial Member Appellant, M/s. B.K. Concast Pvt. Ltd. (hereinafter referred to as the assess .....

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nting application of penal provisions u/s 271(1)(c) of I.T. Act. 2. That on facts and in law the initiation of Penal provisions and resultant levy of penalty of ₹ 5,60,790 based on various grounds and reasoning assigned by the Ld. Assessing Officer was void, illegal, erroneous and without jurisdiction. 3. That the levy of penalty u/s 271(1)(c) sustained by the Ld. CIT(Appeals) for concealment of income and furnishing inaccurate particulars of income based on various grounds and reasoning r .....

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8377; 3,33,38,604/- and as such addition of ₹ 16,49,870/- is made to the short term capital gain on sale of land, on account of excess cost of acquisition claim of the assessee. The AO on the basis of addition of ₹ 16,49,870/- sough to initiate penalty proceedings u/s 271(1)(c) of the Income-tax Act, 1961 (hereinafter the Act ). 3. Penalty proceedings were initiated and despite issuance of a notice, assessee has not preferred to contest the same and consequently, the AO passed the pe .....

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avail them. Since the assessee fails to offer an explanation in this regard, therefore, the case of the assessee is covered by the deeming provision of clause A of explanation 1 of Section 271 (1)(c) and the addition of ₹ 16,49,870/- deemed to represent the income in respect of which particulars have been concealed. It is also pertinent to mention here that assessee has not filed appeal before the Ld.CIT(A) against the assessment order. This reflects that assessee has accepted the addition .....

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Rs.) • Income in respect of which assessee has furnished inaccurate particulars of income for which tax has been sought to be evaded 16,49,870/- • Income Tax, surcharge & Edu. Cess thereon 5,60,790/- • Amount of Tax Sought to be Evaded 5,60,790/- • Minimum Penalty (100% of x 5,60,790/-) 5,60,790/- • Maximum Penalty (300% of x 5,60,790/-) 16,82,370/- Considering the facts & circumstances of the case, I hereby levy a penalty of ₹ 5,60,790/- on the assessee. .....

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by filing the return of income qua AY 2008- 09, the assessee has not concealed income nor has furnished inaccurate particulars rather due to inadvertent mistake, he has wrongly calculated the cost of acquisition of the land and relied upon the judgment cited as CIT vs. Reliance Petroproducts Pvt. Ltd. - 322 ITR 158 (SC). However, on the other hand, the ld. DR for the relevant relied upon the order passed by the CIT (A). 7. Undisputedly, the assessee has admitted during the scrutiny proceedings t .....

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ome. 9. Bare perusal of the provisions contained u/s 271(1)(c) of the Act goes to prove that to impose penalty upon the assessee under the relevant provisions of the Act, two conditions are required to be fulfilled one: that the assessee must have furnished inaccurate particulars of income and two: the assessee must have concealed particulars of income from the tax authorities. 10. The issue in controversy has been dealt with by the Hon ble Supreme Court in the case of Reliance Petroproducts Pvt .....

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the return is found to be incorrect or inaccurate, the assessee cannot be held guilty of furnishing inaccurate particulars. In order to expose the assessee to penalty, unless the case is strictly covered by the provision, the penalty provision cannot be invoked. By no stretch of imagination can making an incorrect claim tantamount to furnishing inaccurate particulars. There can be no dispute that everything would depend upon the return filed by the assessee, because that is the only document whe .....

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