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Shri Dilip Shirodkar Versus w The ITO 18 (2) (1) , Mumbai

2016 (7) TMI 740 - ITAT MUMBAI

Penalty under Section 271(1)(c) - sale of agricultural land - as per assessee capital gain arising on sale of agricultural land located at a village in Goa was exempt as the agricultural land did not constitute ‘capital asset’ which was liable to capital gain tax - Held that:- This fact is not denied that the land was situated in a village. Further, this fact is also not denied that the impugned land is described as agricultural land in the land records maintained with the local authorities. Thi .....

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he immediately revised the return of income and paid tax thereon. Although, the assessee withdrew the claim and paid taxes, the precise location of land and its distance from the municipal limit is still unknown. During the penalty proceedings also nothing was brought on record by the AO to prove that the claim of the assessee was false and distance of the land was actually less than 8 kms from the municipal limits. This facts still remains under shadow of doubts. - During the penalty proceedi .....

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question is not available on record. Under these circumstances, the addition itself remains under the shadow of doubts. Under these circumstances, we do not find it to be a case of concealment of income or furnishing of inaccurate particulars of income, and thus not fit for levy of penalty. - Decided in favour of assessee - I.T.A. No.6607/Mum/2013 - Dated:- 13-7-2016 - SHRI JOGINDER SINGH (JUDICIAL MEMBER) and ASHWANI TANEJA (ACCOUNTANT MEMBER) For The Appellant : Ms Asmita Gupta / Mr Yahya Bat .....

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from his counsel. Keeping in view the situation of the assessee and facts and circumstances of the case, this bench appointed Ms. Asmita Gupta as amicus curie assisted by her colleagues Yahya Batatawala / Anupriya Aggarwal / Nikita Panhalkar / Tripti Jain, who were present in the court room at the time of hearing and volunteered to assist the bench. On behalf of the department, the appeal was argued by Shri Rakesh Ranjan, Senior Ld. Departmental Representative for the Revenue. 3. Ms. Gupta subm .....

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cts narrated by the assessee were false. 4. Ld. DR relied upon the orders of the lower authorities. 5. The brief background of the case is that the assessee sold agricultural land during the year for ₹ 11,21,000 on which the assessee claimed long term capital gain o ₹ 7,53,667 as exempt on the ground that the asset sold was agricultural land. During the course of assessment proceedings it was brought to the notice of the assessee that the land is situated within 8 kms radius of the m .....

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the assessee furnished following explanation: The agreement for purchase of land specifically mentioned the land in question being the agriculture land. The land record extract also states the land in question being the agriculture land. On the advice of his then chartered accountant, the assessee was of the belief that the sale of agriculture land is not taxable to long term capital Gains. It is undisputed fact that the assessee had acted under professional advice of a chartered accountant, who .....

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e AO was not satisfied with the explanation and, therefore, he levied the penalty on the ground that no mens rea is required to be proved for levying penalty. 6. Being aggrieved, the assessee filed appeal before the Ld. CIT(A) and made exhaustive submissions before the Ld.CIT(A), but he also did not agree with the submissions of the assessee and confirmed the penalty upholding the penalty order of the AO. 7. Before us, it was inter-alia reiterated on behalf of the assessee that the assessee was .....

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utset, it is submitted that there is neither any concealment of income nor furnishing of an inaccurate particulars of such income. The addition made by the AO in the assessment order is solely on account of different views taken on the same set of facts which at best can only be termed as difference of opinion and certainly not concealment of income or furnishing of an inaccurate particulars of such income. Mere disallowance of a claim in the assessment proceedings cannot be a sole basis for lev .....

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umstances relating the only addition made by the AO and further not disputed in appeal are as under:- The Appellant had purchased an agricultural land \(jointly with Pradeep K. Mhaskar) situated at Village Poriem Tluka Sattari, North Goa. The agricultural land was purchased from Anand Gopal Mhaskar and Mrs. Shubhada Mhaskar in April 2004. The purchase consideration for such agricultural land was ₹ 3,20,000/-. The entire consideration was paid by the Appellant. In November 2007, this land w .....

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llant was under a bonafide belief that since the capital gains arising on account of sale of agricultural land is exempt from tax, The AO has in his assessment order has observed that since the agricultural land was within 8 kms of the municipality limits, the capital gains arising out of sale of land is taxable. It is respectfully submitted that the claim made or view taken by the Appellant was based on the advice of the then tax consultant which in the view of the AO was not correct. The purch .....

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n it is found that the assessee has concealed the particulars of his income or furnished inaccurate particulars of such income. The section presupposes a conscious act on the part of the Appellant to have concealed income or furnish inaccurate particulars of such income and merely because the additions/disallowances have been made in the assessment order, would not by itself make that disallowance an act of concealment or furnishing of inaccurate particulars. In view of the facts of the case and .....

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mstances of the case it falls within the exception provided in Explanation I to section 271(1)(c) of the Act as the claim is based under bone fide belief supported by professional advice. 8. The above submissions have been reiterated and elaborated before us also. Reliance has been placed on the following judgements in support of the argument that no penalty should be levied under such circumstances. 1. Bennet Coleman & Co Ltd ITA No. 2117 of 2012 (Bombay High Court) 2. Chandrapal Bagga 261 .....

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is not well educated. The assessee is apparently not aware of the nitty-gritties of the income-tax proceedings. The assessee was personally present in the court room. He had apparently acted on the advice of other persons, who were indeed not competent enough to advise the assessee. These facts have nowhere been denied by the AO or Ld. CIT(A). The conduct of the assessee has been such that the moment he came to know that agricultural land may be situated within 8 kms of the municipal limits, and .....

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shadow of doubts. During the penalty proceedings also, nothing was brought on record by the AO to prove that the claim of the assessee was false and distance of the land was actually less than 8 kms. The addition has been made solely relying upon the revised computation sheet filed by the assessee. In the given circumstances, we find that it cannot be said that the claim was not bonafide at all. No mala fide intentions can be attached in this case. The nature of land is accepted by the AO to be .....

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