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2016 (10) TMI 555 - ITAT HYDERABAD

2016 (10) TMI 555 - ITAT HYDERABAD - TMI - Penalty under section 271(1)(c) r.w.s 274 - claim for deduction u/s 54B was made by filing inaccurate particulars - Held that:- Having regard to the rival contentions and the material on record, we find that the assessee has furnished all the information relating to the sale of the land and also purchase of agricultural land in its return of income filed by way of Form ITR. - Assessee is also eligible for deduction u/s 11 of the Act as it is carryin .....

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the penalty on the ground of furnishing of inaccurate particulars of income. Therefore, it is seen that the AO and the CIT (A) are not on the same page for levy of penalty u/s 271 (1)(c) of the Act. Further, mere disallowance of a claim will not automatically attract the levy of penalty. Hon'ble Supreme Court in the case of CIT vs. Reliance Petro Products Ltd, (2010 (3) TMI 80 - SUPREME COURT ) has held that a mere making of the claim which is not sustainable in law, by itself, will not amount t .....

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as Sharma For The Revenue : Smt. U. Minichandran, DR ORDER Per Smt. P. Madhavi Devi, J.M. This is assessee s appeal for the A.Y 2009-10 against the confirmation of the penalty levied by the AO u/s 271(1)(c) by the CIT (A). The assessee has raised the following grounds: 1. The learned CIT (A)-VI erred in facts and law while passing order under section 271(1)(c) r.w.s 274 of the Income Tax Act, 1961. 2. The learned CIT (A)-VI erred in passing penalty order on the basis of concealmentwhere as the a .....

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that the issue was debatable, hence no penalty cannot be levied. 6. The learned CIT (A)-VI erred in stating that investment was made prior to sale of the land whereas the purchase was made only out of the sale proceeds. 7. For these & other ground which may be raised during or before the appeal is heard. It is prayed that the relief be granted . 2. Brief facts of the case are that the assessee is a society registered under the Societies Registration Act. It filed its return of income for th .....

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O observed that the sale consideration admitted by the assessee is less than the market value of the property as per the SRO. He, therefore, required the assessee to explain as to why the property should not be valued at ₹ 5,16,67,000 as per the Stamp Valuation Officer as full value of the consideration for the purpose of computation of capital gain instead of ₹ 3.00 crores shown by the assessee. Assessee explained that the land was agreed to be sold prior to the date of sale at the .....

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y who owns agricultural land which he proposed to transfer to the society. From the recitals in the sale deed, AO observed that the lands were purchased prior to the sale of the original asset and that the assessee, being a society, is not eligible for deduction u/s 54B of the Act. Therefore, assessee s explanation was called for. In response, the assessee submitted that as per section 54B, the deduction is available to an assessee and since the society is also an assessee as per the Income Tax .....

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id lands subsequent to purchase. Therefore, he disallowed the claim of exemption under section 54B of the Act and recomputed the LTCG and brought the difference to tax. Aggrieved, the assessee preferred an appeal before the CIT (A) who confirmed the disallowance u/s 54B, but granted relief as regards valuation of the property and the AO has also passed the consequential order on 13.2.2013 giving relief to the assessee by taking the revised fair market value into consideration. 3. Meanwhile, the .....

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disclosed all the details of the sale and purchase of land in his return of income and therefore, it is not a case of concealment of income or furnishing of inaccurate particulars. Holding that every assessee should keep in view the applicability of law at the time of filing of the return of income and that the assessee being aware and being appraised of the fact that the claim of section 54B was not applicable to the assessee s society even before filing of the return of income, the AO held th .....

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e was an educational society whose income was exempt from tax. However, the assessee had filed its return of income declaring LTCG on sale of immovable property and has claimed deduction u/s 54B of the Act on account of investment of long term capital gains in purchase of agricultural land. It was submitted that the assessee had disclosed all the relevant facts in the return of income filed by the assessee and therefore, it is clearly not the case of concealment of income or furnishing of inaccu .....

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le-C thereto wherein the assessee has reflected the particulars of the asset transferred and has shown the LTCG of ₹ 2,90,84,037 and also to schedule-e which is the statement of set off of the current year s loss u/s 71 wherein the LTCG of ₹ 44,19,890 is reflected which according to him is after set off of the exemption u/s 54B of the Act. Therefore, according to him, the assessee has disclosed all the relevant facts before the authorities below. In support of his contention that pen .....

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r Mills Ltd, 322 ITR 73 v) Hon'ble Punjab & Haryana High Court in the case of CIT vs. Sidhartha Enterprises, 322 ITR 80 vi) Hon'ble Bombay High Court in the case of CIT vs. Nalin P. Shah (HUF), Income Tax Appeal (LOD) No.49 of 2013 vii) ITAT Bangalore in the case of ITO vs.Shri M. Narayanaswamy in ITA No.723/bang/2010 viii) ITAT Mumbai in Super Precast Pvt. Ltd vs. ITO in ITA No.2614/Mum/2012 ix) Hon'ble Delhi High Court in CIT vs. Societex (2012-ITRVHC- DEL-163) x) Hon'ble M .....

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f original asset, but in the case before us, the assessee had purchased the agricultural land prior to the sale of original asset and therefore, it is the case of the concealment/furnishing of inaccurate particulars of income. Further, he also submitted that the assessee being a society is not eligible for deduction u/s 54B of the Act and because of the wrong claim, the assessee is liable for penalty u/s 271(1)(c) of the Act. 6. Having regard to the rival contentions and the material on record, .....

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