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2016 (7) TMI 1129 - ITAT DELHI

2016 (7) TMI 1129 - ITAT DELHI - TMI - Penalty under section 271(1) (c) - Held that:- CIT (A) has deleted the penalty on the arguments advanced by the assesesse, which were not raised before the assessing officer. Hence, in the interest of Justice we set aside the whole issue of the penalty before the assessing officer with a direction to decide the issue afresh after considering all the arguments raised by the assessee. We also held that that the assessee is further entitled to raise any new/ f .....

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venue against the order of Commissioner of Income Tax (Appeals)-III against deleting penalty of ₹ 36,85,892/- u/s 271(1)(c) of the Act vide his order dated 2nd June, 2009. 2. The brief facts of the case are that the assessee, company field its return of income on 31st October, 2005 declaring total income of ₹ 1,47,02,126/-. In the assessment addition of ₹ 1,13,27,415/- was made on account of capital gain with respect to some shops which were revalued in the F.Y. 1996-97. These .....

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e of ₹ 1,22,37,752/- was created. According to the provisions of section 45(2) the assessee was required to disclose capital gain on these shops. As per provision of section 45(2) according to the Ld. AO assessee is liable to pay capital gain tax at the time of transfer of these shops on difference between fair market value as on the date of conversion of the assets and against cost of acquisition at the time of transfer of assets into stock in trade. The assessee has not disclosed this in .....

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August 2007 as well as 17/09/2007 wherein it was stated that the assessee had filed the revised written before finalisation of assessment proceedings and has paid the due tax thereon to purchase peace with the Department and to avoid litigation. Therefore it was the submission of the assessee that it has not concealed any income or furnished any accurate particulars of its income and therefore the penalty may not be levied. Vide letter dated 17/09/2007 once again the assessee submitted that that .....

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the Ld. CIT (A) who in turn held that in fact there is no income but there is a trading loss arising into the hands of the assessee. He further held that though in the year under consideration the appellant had not declared any income yet in the subsequent year that is assessment year 2006-2007 by furnishing return of income on 30 of November 2006 the appellant had credited the prior period income representing the reversal of revaluation reserve of ₹ 1.22 crores. This amount was offered fo .....

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ut the year of assessment of income, penalty will not be imposable because the assessee has offered income in a different year. Therefore after considering the totality of the facts and the law Ld. CIT (A) deleted the penalty. Against this order of the Ld. CIT (A) revenue is in appeal before us 3. Ld. DR submitted that the order of ITAT in case of the assessee for assessment year 2004- 2005 has clearly laid down the facts of the case about the taxation of the shops where in para No. 2 it has bee .....

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e the assessee has surrendered the income with the condition it cannot lead to a situation that no penalty should be levied. Further LD DR vehemently stated that revision in the return of income has been done after the assessee was confronted with the issue and there is no dispute of income subject to taxation in which year therefore the reliance by the Ld. CIT(A) in deleting the penalty on the decision of the Hon ble Gujarat High Court is erroneous. Therefore it was submitted that the Ld. AO ha .....

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y were taken by the Society and therefore mistakenly income on account of revaluation reserve has not been offered under section 45 (2) of the Income Tax Act. He further submitted that the facts of the issue were already disclosed in the order of the appellate tribunal for assessment year 2004 - 05 in ITA No. 3526/DEL/2007 dated 16/05/2008 therefore the facts were already disclosed to the AO. He further referred to the page No. 10 of the order of the Ld. Commissioner of Income Tax (A) is that th .....

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e assessing officer. In view of above arguments he vehemently supported the order of the Ld. Commissioner of Income Tax (A) and submitted that the penalty under section 271(1) (c ) may not be levied and the order of Ld CIT (A) may be upheld. 5. We have carefully considered the rival contentions and also perused the orders of the lower authorities in penalty proceedings as well as the order of the Ld. assessing officer under section 143 (3) of the Income Tax Act 1961. On perusal of the assessment .....

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officer completed the assessment on 26th of March 2007 determining total income of the assessee at ₹ 1132 7415/-. As the assessee has not filed any appeal before the Ld. Commissioner of Income Tax (A) against the assessment order, vide order dated 24/09/2007 Ld. AO levied penalty under section 271 (1) (C) of ₹ 3685892/-. On appeal before Ld. CIT (A) the penalty was deleted. The Ld. CIT (A) has deleted the penalty after considering various arguments raised by the assessee before him. .....

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