TMI Blog2019 (8) TMI 453X X X X Extracts X X X X X X X X Extracts X X X X ..... nces of the case, we are of the opinion that the explanation given by the assessee is bonafide and also justified, no penalty can be levied u/sec. 271B of the Act. In a similar circumstances, the coordinate bench of the tribunal in the case of K.V.V. Prasad [ 2019 (6) TMI 1095 - ITAT VISAKHAPATNAM] who is also entered into agreement along with the assessee, held that no penalty can be levied u/sec. 271B. - Decided in favour of assessee. - ITA No. 74/VIZ/2019 - - - Dated:- 7-8-2019 - Shri V. Durga Rao, Hon ble Judicial Member And Shri D.S. Sunder Singh, Hon ble Accountant Member For the Assessee : Shri G.V.N. Hari Advocate. For the Department : Shri D.V. Subba Rao Sr.DR ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer is justified in levying penalty of ₹ 1.00 lakh u/sec. 271B of the Act. 4. Before us ld. counsel for the assessee has submitted that during the year under consideration, the assessee entered into only one transaction which is sale of land, which resulted into capital gains, but the same is treated by the Assessing Officer as business income and submitted that levy of penalty u/sec. 271B in respect of a single transaction is not justified. He also submitted that in the similar circumstances, the coordinate bench of the tribunal in the case of K.V.V. Prasad Vs. ITO in ITA No. 78/VIZ/2019, dated 21/06/2019 deleted the penalty levied by the Assessing Officer u/sec. 271B of the Act. 5. On the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inate bench of the tribunal in the case of K.V.V. Prasad (supra) who is also entered into agreement along with the assessee, held that no penalty can be levied u/sec. 271B. For the sake of convenience, the relevant portion of the order is extracted as under:- 7. We have heard both the parties and perused the material placed on record. For the sake of clarity and convenience we extract the facts of the case from page No.2 of the penalty order which reads as under: The assessee entered into an agreement dated 10.10.2002 with one Shri RK Mittal of Hyderabad for purchase of land admeasuring 9507 sq.yds at Somajiguda, Hyderabad and paid an initial advance of ₹ 50,000/- and made certain payments subsequent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sst.Year 2008-09. Further, the assessee filed a letter dated 06.11.2010 by which he agreed to be assessed at ₹ 265/- lakhs being income from Capital Gains, for the Asst.Year 2008-09. The assessee undertook to pay the consequential taxes before 31.12.2010. The assessee however did not pay any taxes thereafter. 7.1 We also extract the observations of the AO for which the AO treated the business transactions instead of capital gains and levied the penalty holding that the assessee is liable for penalty u/s 271B of the Act. The following observations made in the Assessment Order dated 30.12.2010 and Appellate order dated 30.11.2011 are relevant: 1. The assessee while entering into an ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erification dated 10.10.2002 revealed that the stamp papers sent for verification either not sold by the stamp vendor Shri M.Satyanarayana or they might have old stamp papers, which are tampered with the 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 relinquishm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y single transaction which is stated to be advance for purchase of land and property and there were no series of transactions. The assessee was under the impression that the advance received by the assessee was not taxable in the impugned assessment year since the transaction was not finalized. Even if it is to be taxed, the same is to be taxed under the head capital gains , but not under the head business income . That was the reason that the assessee did not get his accounts audited as required u/s 44AB of the Act. There is no dispute that the transaction was single transaction. No other expenditure was also claimed by the assessee. The AO did not bring any other material to support that the assessee has carried on the business in the e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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