TMI Blog2019 (2) TMI 809X X X X Extracts X X X X X X X X Extracts X X X X ..... concealed the particulars of income In the instant case, it is undisputed fact that the Hon’ble High Court has admitted the appeal of the assessee with regard to quantum and the entire information is furnished by the assessee in the return of income. In view of the foregoing facts and circumstances of the case , we hold that in the instant case, the assessee has neither concealed the income nor furnished the inaccurate particulars of income, hence, there is no case for penalty u/s 271(1)(c). - Decided in favour of assessee - I.T.A.No.375/Viz/2017 And I.T.A.No.457/Viz/2017 - - - Dated:- 13-2-2019 - SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER For The Appellant : Shri D.K.Sonowal, CIT DR For The Respondent : Shri G.V.N.Hari, AR ORDER PER D.S. SUNDER SINGH, Accountant Member: These appeals are filed by the revenue against the order of the Commissioner of Income Tax (Appeals) [CIT(A)]-2, Guntur vide Appeal.No.005/2013-14 dated 03.04.2017 and 006/2012-13 dated 23.03.2017 for the Assessment Year (A.Y.) 2008-09. Since the grounds raised in the appeals are identical, these appeals are clubbed, heard together and di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mittal is to receive ₹ 53,42,65,300 @ ₹ 28,100 per sq.yd. while assessee and Shri KVV Prasad were to receive ₹ 30,23,06,700/- @ ₹ 15,900 per sq.yd. AO noticed that as per the agreement dated 12.11.2007, the assessee is entitled to receive the sum of ₹ 15,11,45,400/- where as Shri K.V.V.Prasad is entitled to a sum of ₹ 15,11,61,300. It was further noticed by the AO that out of the said amount, a sum of ₹ 11,30,00,000/- was already paid to the assessee and Shri K.V.V Prasad at the time of agreement dated 12.11.2007 in the proportion of ₹ 5,40,00,000/- and ₹ 5,90,00,000/- respectively. As per the said agreement, the balance amount was to be paid in two more instalments i.e. first instalment to be paid after 120 days of registration of sale deed and the second instalment will be after recording of delivery possession by the court. Apart from transferring their nominee rights under the tripartite agreement the only other obligation of the assessee and K.V.V.Prasad is to take steps for nomination of Fortuna Infrastructure India (P) Ltd. in the records of EP No.155/2 in OS No.1402/1996 on the file of Sr.Civil Judge, City Civil Court, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose the AO relied on a number of decisions of Hon ble Supreme Court as well as different High Courts. So far as the year of taxability is concerned, AO concluded that since the assessee has transferred her right , for a consideration during previous year relevant to AY under dispute, the amount received is taxable in the impugned assessment year. Having come to such conclusion, the AO proceeded to compute the amount received as income under the head business and profession'. Out of the total amount of ₹ 5,40,00,000/- received by the assessee, AO allowed the deduction of ₹ 2,00,00,000/- paid to Shri R.K. Mittal and the sum of ₹ 50,00,000/- returned back to Shri T.C. Ashok and brought the balance amount of ₹ 2,90,00,000/- to tax. 3. Aggrieved by the order of the AO, the assessee went on appeal before the CIT(A) and challenged the assessment on two issues. Firstly, the year of taxability and secondly the head of income under which the amount taxable. The Ld.CIT(A) in its appeal in I.T.A No.183 184 dated 30.11.2011 upheld the addition made by the AO holding that the transaction is an adventure in the nature of trade and accordingly confirmed the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date of purchase. 7. The assessee has entered into similar deals of land purchase where the land in litigation, which clearly establishes the fact that the assessee has been carrying out the business of purchasing of lands in litigation and selling them at a higher price where risk and margins are high. Therefore, the purchase of land in question can no way be termed as an investment but is only a stock in trade. 8. The consideration received by the assessee represented consideration received in relinquishment of rights acquired through an agreement entered into with RK Mittal. Even the buyers M/s Fortune Infra (P)Ltd. are fully aware that the assessee cannot improve upon the title. Whatever right that he had acquired by virtue of the agreement dated 10.10.2002 is being transferred for a definitive consideration. 9. As far as the assessee is concerned, there is no obligation on her part to refund the sale consideration received even if it were proved that the title was defective. Hence, it can be stated that gains accrued to the assessee on the date of Tripartite agreement dated 10.11.2007 became final in the previous year relevant to the A.Y. 2008-09. 10. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the year in which the income is to be taxed also in dispute. According to the assessee, she had entered into an agreement for purchase of the land from Shri R.K.Mittal by an agreement cum General Power of Attorney dated 10.10.2002 for purchase of 9507 sq.yds of land for a consideration of ₹ 28,100/- per sq.yard. The assessee had paid the part amount of ₹ 50,000/- as advance to the vendor and subsequently entered into a tripartite agreement on 12.11.2007 conferring the rights on M/s Fortuna Infrastructure India Private Ltd., along with others and received the sum of ₹ 5.90 crores as advance till the date of Registration of the tripartite agreement. According to the assessee, the title of the property in question is sub-judice and hence very foundation of the claim of the ownership made by the original owners, and consequently the rights of the Sri R.K.Mittal as decree holder and the rights derived by her through the agreement with R.K.Mittal with regard to the property are all in serious jeopardy and nothing would be due if the appeal is decided against R.K.Mittal. The assessee had placed evidences regarding the claims of ownership made by the rival claimants w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TE REGARDING LONG TERM CAPITAL GAINS An agreement of sale -cum- general power of attorney was executed by Sri R.K. Mittal on 10/10/2002 for the sale of 9507 sq. yds. In TS. No.20/IA, 20/2 and 20/3 at Somajiguda, Hyderabad in favour of the assessee @ ₹ 28.100/- per sq. yd. Inrespect of the said, property litigation is pending in, the court since 1996 The amounts paid by the assessee to Sri R.K, Mittal were endorsed on the back of the agreement. The assessee along with others entered into a Tripartite Agreement On 12/11/2007 whereby the rights conferred on him by the above said agreement are to be vested in M/s. Fortuna Infrastructure India Pvt.Ltd, Hyderabad. It is submitted that the agreement rights transferred by the assessee did not have any cost of acquisition. Though some payments were made under the agreement these amounts were towards the consideration payable under the agreement by the assessee and would have been adjusted against the same at the time of registration of sale deed in favour of the assessee in the normal course. In other words, the amounts paid under the agreement by the assessee were only advances and they were not the costs incurred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -12, but not A.Y.2008-09. The complete details were furnished before the AO along with the return of income. The AO has taken all together a different view and held that the transaction was completed in the previous year 2007-08 relevant to the A.Y. 2008-09, hence taxable in the A.Y. 2008-09. Similarly, the AO has also taken a view that the sum received by the assessee was taxable under the head business as adventure in nature of trade but not capital gains, keeping in view of the facts and circumstances in which the assessee had entered into the transaction. Though the view of the AO was finally confirmed, prima facie it is argued that two views are possible with regard to the taxability of income. Since the entire particulars are placed before the AO, the issue was kept open before the AO and it cannot be said that the assessee had furnished the inaccurate particulars. In this case, the entire material was placed before the AO and the assessee has given her view and claimed that the amount received by the assessee is neither taxable in the year under consideration nor taxable as capital gains. The view taken by the assessee was taxability of income under the head capital gains si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f section 271(1)(c). Therefore, the Commissioner (Appeals) had rightly deleted the impugned penalty levied upon the assessee. [Para 12] The expression concealment of income implies that the income is being camouflaged or covered up so as it cannot be seen, found, observed or discovered. The expression furnishing of particulars of income implies furnishing of details or information about income which is not in conformity with the facts is true. It does not extend subject to areas such as taxability of income, admissibility, deduction and interpretation of law. The coordinate bench of ITAT in the case of Cooperative Textile Mills Ltd. V. ACIT (2015) 43 CCH 0164 (Del.Trib) held that making an incorrect claim does not amount to mentioning of inaccurate particulars. In the instant case, the AO in the assessment order stated that there is total absence of bonafide and on the other hand, there is presence of malafide. However, the AO has not discussed how there was absence of bonafide and the presence of malafide. Similarly, the AO levied the penalty for furnishing the inaccurate particulars and for concealing the income. From plain reading of the penalty order, it shows that the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elied on the decision of Reliance Petro Chemicals, wherein, Hon ble Supreme Court held that merely because, the assessee had claimed the expenditure, the claim was acceptable or not acceptable to the revenue that by itself would not in our opinion attract the penalty u/s 271(1)(c) of the Act. The Ld.CIT(A) also relied on the decision of Hon ble High Court of Bombay in the case of Metal Rolling Works Limited Vs. CIT (supra), wherein Hon ble High Court of Bombay held that once the receipt is disclosed, the assessee cannot be said to have concealed the particulars of income. Similarly, in the case of CIT-21 Vs. Advaita Estate Development Pvt. Ltd., the Hon ble High Court of Bombay held that when an appeal has been admitted in quantum of proceedings by High Court then that itself is an evidence of the issue being debatable not warranting penalty. In the instant case, it is undisputed fact that the Hon ble High Court has admitted the appeal of the assessee with regard to quantum and the entire information is furnished by the assessee in the return of income. In view of the foregoing facts and circumstances of the case , we hold that in the instant case, the assessee has neither conceal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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