TMI Blog2017 (8) TMI 1581X X X X Extracts X X X X X X X X Extracts X X X X ..... and circumstances of the case, we concur with the findings of the ld. CIT(A) on the issue in question. Thus the appeal filed by the Revenue is dismissed. - D. B. Income Tax Appeal No. 169 / 2017 - - - Dated:- 8-8-2017 - HON'BLE MR. JUSTICE K.S. JHAVERI And HON'BLE MR. JUSTICE INDERJEET SINGH For the Appellant : Mr. Anil Mehta with Mr. Sameer Sharma ORDER By way of this appeal, the appellant has assailed the judgment and order of the Tribunal whereby the Tribunal has dismissed the appeal preferred by the department. Counsel for the appellant has framed the following question of law:- i) Whether on the facts and in the circumstances of the case and in law the ITAT is justified the deleting the penalty of ₹ 10680000/- imposed by the AO under section 271AAA of the income Tax, Act, 1961. Counsel for the appellant has raised the contention that though the AO found the certificate taken from the Panchayat was fraud and the penalty was imposed but no such contention has been raised or any ground was taken before the Tribunal. We have gone through the judgment of the Tribunal. In par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount for the year. The only dispute in this case is of accounting treatment of the transaction of the JV Vs sale of land. The AO treated the transaction as sale of land whereas the assessee treated the same as development agreement/JV. Assessee treated this transaction as a JV/Development agreement on the basis of registered development agreement which was duly accepted by the Stamp Duty Authorities / JDA and other Govt. Dept. AO s observation is purely based on certain terms and conditions mentioned in the development agreement such as advance money received, rate @ ₹ 1000/- per Sq Ft, fixed time limit for completion of the project, profit shareable in the ratio of 21:79 with Guru Pragya etc. In this regard, AO has merely raised his doubt without any basis or documentary evidences found ruing the search operation. It is pertinent to mention here that AR has explained all the objections raised by the AO on the terms and conditions mentioned in the development agreement vide letter dt. 9th Sep 2013 [Para (e) internal pg 5 to 7] (Ref PB Pg 184 to 191). On perusal of the penalty order, it is also seen that AO has not controverted all these facts. It is also seen that advance mon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferred any appeal against the impugned assessment order which clearly shows that assessee has accepted the contention of the AO in respect of the additions made. In this regard, AR has mentioned that not filing of the appeal cannot be a ground for levy of penalty, by relying on the decision of Hon ble Jurisdictional High Court in case of Jawahar Kala (Supra). (vii) Even otherwise also, the assessee is covered by sub clause 2 of sec 271AAA of the Act. In the statement recorded u/s 132(4) of the Act, assessee has admitted the income and stated the manner in which income derived and declared the same in her ROI filed after search and paid taxes thereof. In view of facts and circumstances of the case as mentioned above, levy of penalty of ₹ 1,06,08,000/= u/s 271AAA of the Act cannot be sustained, hence deleted. 2.4 We have heard the rival contentions and perused the materials available on record. A search was conducted on 22-09-2010 in the case of Shree Ram Group, Jaipur to which the assessee belongs . The assessee is an individual and she derives income from real estate business, and capital gain. The assessee purchased agricultural land and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - 61). The statement of Shri Ashok Agarwal, husband of the assessee admitted the income from Joint Venture Transaction with Gurupragya. In his statement he said that the land was sold through JV to M/s. Guru Real Pragya Mart Pvt. Ltd. for total sale consideration of ₹ 9.86 crore and out of which ₹ 6.01 crore was received and the remaining amount of ₹ 3.85 crore was outstanding. Smt Renu Agarwal also signed this statement. The manner in which the undisclosed income derived was also explained. The assessee had spelled out in detail the nature of the transaction. The assessee had stated that the amount is shown as advance in the books of account. The said income was fully recorded in the books of account found at the time of search. The assessee was acting on the basis of terms of development agreement (Copy at PB Page 62- 94) and following the Percentage Completion Method for this project. The sale was recorded on the basis of the figures of sales intimated by the developer. The developer M/s Gurupragya Real Mart Pvt Ltd (Gurupragya Infra Ltd) intimated the assessee s share in sales i.e. 3,35,762 Sq ft area amounting to ₹ 4,72,96,492/- on 31.03.2011(Certific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it on sale of land came to ₹ 10,60,80,000. The assessee has shown profit of ₹ 4,58,25,167 of AY 2011-12 and profit of ₹ 3,72,01,442/- of AY 2012-13 and unsold portion shown as stock . The AO rejected the submission of the assessee because of mainly following reasons: - (a) Consideration for sale of land was stated at ₹ 9.86 Crores while undisclosed income is determined at is ₹ 10,60,80,000/-. (b) In statement, it is stated that land was sold while in return, the profit shown from sale of project through joint Venture. (c) Undisclosed income was not recorded in the books of account found during search. (d) The assessee has not paid tax together with interest in respect of undisclosed income of ₹ 10,60,80,000. (e) Since the assessee has not filed appeal and hence the issue is not debatable. The AO treated the amount of ₹ 10,06,80,000/- as undisclosed income of the assessee and initiated penalty proceedings u/s 271AAA of Income Tax Act. The assessee filed detailed explanation objecting the levy of penalty (Copy at PB Page 184-191) which was rejected by the AO in summary manner. The AO ..... X X X X Extracts X X X X X X X X Extracts X X X X
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