Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

Agesh Hariram Dhupar M/s Shantilal Gandhi Versus The Income Tax Officer, Ward 1, Ahmednagar

Penalty u/s 271(1)(c) - default in declaring the income - whether income is not assessable in the hands of assessee in his individual capacity at the first place and is rightly assessable in the hands of different person i.e. AOP? - Held that:- plea of the assessee that the bank statement were given to the chartered accountant and he failed to offer the impugned income is too vague and bald to be assigned any acceptance. The bounden duty of assessee to furnish true and correct particulars of inc .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s as per the framework of law. The assessee has not shown to have paid any tax towards impugned gain. Thus, this plea of oversight on behalf of the Assessee is listless. Hence, no case of reasonable cause for omitting to include the income in the first return is successfully made out. The preponderance of probabilities is weighed against the assessee. We also wish to note here that penalty proceedings in question are governed by S. 271(1)(c) read with Explanations appended thereto. The assessee .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ties were to bear their own losses or retain their own profits contrary to the case made out by the assessee. If the version of the Assessee is to be given any credence, one has to see the conduct of the assessee. The obligations of the Assessee as one of the members who allegedly combined to form alleged AOP is placed at par with other members to comply with tax laws. No PAN number in the capacity of AOP was reportedly obtained. The alleged AOP is also not shown to have paid any advance tax or .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e personal capacity which belies presence of any alleged understanding in the nature of purported AOP. The above is enumeration to show that no assertive justification has been advanced by the assessee to prove bonafides of plea of existence of AOP. Mere abstract reliance on case laws without any connection with the underlying facts deserves to be discredited. - In the light of above discussion, the explanation offered for the default in declaring the income is palpably improbable. Omission .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nalty order of CIT(A)-IT/TP, Pune dated 01.01.2014 relating to assessment year 2008-09 passed under section 271(1)(c) of the Income-tax Act, 1961 (in short the Act ). 2. By way of the present appeal, the assessee has challenged the action of the CIT(A) in confirming the impugned penalty levied under section 271(1)(c) of the Act at ₹ 8,82,000/- by the Assessing Officer. 3. Briefly stated, the relevant facts concerning the issue raised by the assessee are that the assessee filed his return o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sale consideration at ₹ 47,68,365/-. The Assessing Officer found on verification of the return of income that the assessee has not declared this transaction of sale of land in his return of income. In response to notice by Assessing Officer, the assessee filed his revised return on 26.08.2010 in which he has shown total income of ₹ 42,42,030/- including Long Term Capital Gain (LTCG) arising from sale of land at ₹ 41,24,384/-. Thereafter, the assessee filed another revised retur .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

eged that assessee has concealed income from the LTCG by not disclosing his share on sale of land in the return of income. In the penalty order, the Assessing Officer observed that assessee did not offer any plausible explanation for concealment of income. The Assessing Officer noticed that the explanation offered by the assessee in the course of the penalty proceedings whereby the assessee submitted that since 2005 the assessee was engaged as an estate broker. In 2005 to 2007, he along with his .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he elder brother of the assessee suffered from health problems of serious nature, on which he had to be hospitalized. He was therefore unfortunately engrossed in his brother s treatment and therefore handed over bank accounts and other details to his CA for preparing tax return, which was filed in March, 2009. As all these transactions were reflected in the bank accounts, he was under the bonafide belief that his CA must have disclosed income in the return of income. It is only on receipt of not .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

so to his CA. He stressed that there was no malafide intention whatsoever, on his part to evade tax liability. He paid the taxes in the course of assessment proceedings and has also not contradicted the assessment by way of appeal. The Assessing Officer, however, perceived the facts against the assessee and alleged that the assessee has omitted to offer the income altogether in the return of income and therefore the assessee is liable to penalty for concealment of income. 4. Aggrieved by the pen .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

his friends later formed AOP for this venture. The CIT(A) was not convinced with the explanation offered by the assessee to be bonafide one. He observed that land were purchased by the assessee and others in the capacity of co-owners. The AOP was formed later. The CIT(A) thus observed that land so purchased did not belong to AOP and therefore AOP could not have paid taxes on the land which did not belong to it. The CIT(A) also noted that there is no reference found anywhere that members introdu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nly after the Department started enquiries and in the absence of information in the possession of the Department, the taxes due to the Department could not be collected. The CIT(A) also observed that the assessee had duly verified his return of income as true and correct. It is required from the taxpayers that they exercise due diligence and declare correct income while filing the return of income. The CIT(A) accordingly confirmed the action of the Assessing Officer in imposing the penalty at a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e Assessing Officer that due to serious health problems faced by the brother the assessee could not pay attention to the matters and relied upon the Chartered Accountant resulting in error. Thus, there is a reasonable cause as contemplated under section 273B of the Act. He thereafter submitted that the Assessing Officer as well as CIT(A) failed to appreciate the position on facts in proper perspective. The agricultural land in question was purchased along with other four co-owners with an intent .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

-owners as well as the assessee. He has offered the income and paid the taxes only to avoid any unwarranted litigation. The penalty is thus not justified. He, thereafter, adverted our attention to the English Translation of the development agreement at Page No.20 of the Paper Book. He observed with reference to the aforesaid development agreement that the agreement was entered into on 11.03.2005 between five parties including the assessee with vendors namely Smt. Kiran Pradipkumar Agrawal. Thus, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

, it is evident that the intention was to exploit the land so acquired commercially as a joint venture and consequently the income therefrom is required to be taxed in the hands of the AOP and not in the hands of the respective individual owners. It is a different matter that the other joint owners as well as the assessee has offered the income in their respective hands which will not change the position of law. For the proposition that income to be assessed in the hands of the AOP, he referred .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

o the Oxford Dictionary, "to join in common purpose, or to join in an action." Therefore, an association of persons must be one in which two or more persons join in a common purpose or common action, and as the words occur in a section which imposes a tax on income, the association must be one the object of which is to produce income, profits or gains. This was the view expressed by Beaumont, C. J., in Commissioner of Income-tax v. Lakshmidas Devidas at page 589 and also in In re Dwara .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tute an association ........" We think that the aforesaid decisions correctly lay down the crucial test for determining what is an association of persons within the meaning of section 3 of the Income-tax Act, and they have been accepted and followed in a number of later decisions of different High Courts to all of which it is unnecessary to call attention. It is, however, necessary to add some words of caution here. There is no formula of universal application as to what facts, how many of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hat the present agreement between the assessee and other co-owners was in the nature of AOP and the income generated from the sale of land should be correctly taxed in the capacity of the AOP. Shri Naniwadekar thus asserted that the income itself has been wrongly assessed in the hands of assessee. There is, thus, no justification to impose penalty based on such a wrong assessment. He further exhorted that penalty proceedings are independent of the assessment proceedings and observations made in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

existence of AOP is required to be inferred from the action of the various co-owners where the parties joined hand for mutuality of interest to share income and liability. He also insisted that offering of income by other co-owners in their individual capacity as capital gains is irrelevant consideration for determination of the taxability in the hands of the assessee. Shri Naniwadekar thus submitted that in view of the income assessable in the hands of AOP as demonstrated above, the action of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

because of the AIR information in possession of the Revenue which would have otherwise escaped assessment causing loss to the Revenue. The penalty was imposed at minimum rate and is merely a remedy for the possible loss of revenue. The Ld. DR submitted that the land purchased by the co-owners were sold and the substantial profits were generated. The substantial amount was received through banking channel which is reflected from the bank statement. Therefore, the submissions of the assessee that .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

efore the theory propounded by the assessee that the income is taxable in the hands of the AOP is also devoid of any merit. He, therefore, submitted that no interference is called for with the action of the Revenue in imposing the minimum penalty on these speaking facts. 10. We have carefully considered the rival submissions. The assessee has assailed the imposition of penalty under section 271(1)(c) and contends that that no penalty is warranted in the facts and circumstances of the case in vie .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

not file return of income within the due date specified under section 139(1) of the Act. The impugned capital gain of ₹ 41,24,384/- and another income towards bank interest ₹ 21,941/- was not offered for taxation in the belated return of income filed under S. 139(4) of the Act. The income was however offered by a subsequent return in the course of scrutiny proceedings. The Assessing officer initiated penalty proceedings in the course of assessment proceedings and imposed penalty unde .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the income remains undeclared and kept away from the revenue authorities. Secondly, the income was stated to have been declared in subsequent return as discussed above, only after the income was found by the assessee to be detected by revenue as per specific AIR information. Thus, the onus squarely lies on the assessee to justify the absence of any culpability. The plea of the assessee that the bank statement were given to the chartered accountant and he failed to offer the impugned income is t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

part from declaring the income as aforesaid; the assessee is expected to meet advance tax and self assessment tax obligations as per the framework of law. The assessee has not shown to have paid any tax towards impugned gain. Thus, this plea of oversight on behalf of the Assessee is listless. Hence, no case of reasonable cause for omitting to include the income in the first return is successfully made out. The preponderance of probabilities is weighed against the assessee. We also wish to note h .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of business income and taxable in the hands of the AOP and thus not rightly susceptible to tax in the hands of the assessee at the first place. We note that the several citations were referred to lend support to this plea. However, we find such averment to be an argument of despair. In the instant case, the investments were made from respective individual sources and the shares were definite and ascertainable. As borne out from the conduct of the other co-purchasers of the property, the so calle .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     Latest Happenings     ↓  

Forum: Manpower Service provider

Forum: Due date of Filing TRAN-1

Forum: Excise duty credit on finished stock at additional place of business.

Forum: 3B mistake

Highlight: Diversion of income at source - Joint venture agreement - 97% of the receipt transfer to M/s TRG Industries (P) Ltd. - scope of the agreement - it is diversion by overriding title - not taxable in the hands of assessee - HC

Highlight: Expenditure on eligible projects or schemes u/s 35AC - After 01.04.2017 the legislature desired to withdraw such deduction. - The Union legislature was competent to introduce such amendment - HC

Highlight: Transfer of trading assets at cost price, the profit component also stood transferred to the outgoing Directors, which otherwise belonged to the Company - the fact that AO has made the addition in the hands of the Directors would not make any difference - additions confirmed - HC

Highlight: The interest u/s 234B of the Act cannot go beyond the stage of S.245D(I) before the Settlement Commission - HC

Highlight: Galvanized iron pipe is a different commercial commodity than a iron pipe, therefore the activity of galvanization in our considered opinion amounts to manufacture - Deduction u/s 80-IB allowed - HC

Highlight: Penalty u/s 271C - non deduction of TDS on interest paid to sister concerns in terms of Section 194A - Levy of penalty confirmed - HC

Highlight: Disallowance of interest - reference to section 179 - The legislature has also recognised, that the doctrine of lifting of veil in the matter of tax dues is to be applied to prevent fraud etc. and not where the company has suffered despite its normal bona fide function. - HC

News: RBI Reference Rate for US $

Notification: Amendment in Notification No. S.O. 3118(E), dated the 3rd October, 2016

Highlight: Discount on ESOP to be allowed as business expenditure u/s 37(1), during the years of vesting on the basis of percentage of vesting during such period, subject to upward or downward adjustment at the time of exercise of option.

Notification: Central Government appoints the 20th September, 2017 as the date on which proviso to clause (87) of section 2 of the Companies Act 2013, shall come into force

Notification: Companies (Restriction on number of layers) Rules, 2017

Highlight: Penalty u/s 271(1)(c) - additional income disclosure - surrender of income post survey u/s 133A - he disclosure made by the assessee is voluntary in nature, in the revised return - no penalty

Highlight: Reopening of assessment - notice u/s 148 issued on the directions of JCIT / CIT - a perusal of reasons for initiating reassessment proceedings clearly show that they are against the sprit of provisions u/s 147

Notification: All Industry Rates of Duty Drawback Schedule

Highlight: MAT - Adjustment to book profit - computation u/clause (f) of Explanation-1 to section 115JB(2) is to be made without resorting to the computation as contemplated u/s 14A r.w.Rule 8D of I.T. Rules.

Notification: The Customs and Central Excise Duties Drawback Rules, 2017

Highlight: Addition on account of alleged suppression of service value received - the addition made simply believing the Form 26AS will be an arbitrary exercise of power which cannot be sustained

Notification: Exempts intra state supply of heavy water and nuclear fuels from DAE to NPCIL

Notification: Seeks to amend notification No. 12/2017-UTT(R) to exempt right to admission to the events organised under FIFA U-17 World Cup 2017

Notification: Seeks to amend notification No. 11/2017- UTT(R) to reduce CGST rate on specified supplies of Works Contract Services

Highlight: Liability to pay duty on import of software - Though no authorization was given by the appellant to DHL, it is an undisputed position that the software has, in fact, been ordered by the appellant and have been delivered to them by DHL - the appellant is to be considered as the importer

Notification: Exempts inter-state supply of heavy water and nuclear fuels from DAE to NPCIL

Notification: Seeks to amend notification No. 09/2017-IT(R) to exempt right to admission to the events organised under FIFA U-17 World Cup 2017

Notification: Seeks to amend notification No. 08/2017-IT(R) to reduce CGST rate on specified supplies of Works Contract Services

Notification: Exempts intra state supply of heavy water and nuclear fuels from DAE to NPCIL

Notification: Seeks to amend notification No. 12/2017-CT(R) to exempt right to admission to the events organised under FIFA U-17 World Cup 2017

Notification: Seeks to amend notification No. 11/2017-CT(R) to reduce CGST rate on specified supplies of Works Contract Services.

News: Tax on fuel more important for a dry state like Gujarat

Highlight: For an ayurvedic medicine to be classified under Chapter 30 has to pass the test whether it is for cure of any disease. If the same is only meant for care, then such product would not fall under medicament.

Highlight: Demand of interest - the period of limitation that applies to a claim for the principal amount should also apply to the claim of interest thereon.

Highlight: Government issues new notifications under CGST, IGST and UTGST to grant fresh exemptions in respect of certain supplies.

Circular: Extension of time limit for submitting the declaration in FORM GST TRAN-1 under rule 117 of the Central Goods and Services Tax Rules, 2017

Forum: Input tax credit

Forum: Cess paid instead of SGST

Forum: Construction of single unit bungalow

Article: SIMPLIFIED E-WAY BILL UNDER GST

Article: SERVICES UNDER REVERSE CHARGE UNDER GST REGIME

Highlight: Rate of exchange of conversion of the foreign currency with effect from 22th September, 2017 - Notification

Highlight: Companies (Acceptance of Deposits) Second Amendment Rules, 2017 - Notification

Highlight: Implementing Electronic Sealing for containers by exporters under self-sealing procedure prescribed by Circular 26/2017-Cus dated 1st July, 2017 and Circular 36/2017 dated 28 th August, 2017. reg. - Circular

Highlight: Amendment to Paragraph 2.72 (b) of the Handbook of Procedures of the Foreign Trade Policy (FTP) 2015-20 - Public Notice

Notification: Amendment in Appendix 3 (SCOMET items) to Schedule- 2 of ITC (HS) Classification of Export and Import Items 2012

Circular: Amendment to Paragraph 2.72 (b) of the Handbook of Procedures of the Foreign Trade Policy (FTP) 2015-20

Notification: Companies (Acceptance of Deposits) Second Amendment Rules, 2017

Notification: Rate of exchange of conversion of the foreign currency with effect from 22th September, 2017



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version