9911796707
TMI Blog2025 (5) TMI 707X X X X Extracts X X X X X X X X Extracts X X X X ..... 43(1). However, based on information received during the assessment proceedings for A.Y. 2013-14, the case was reopened under section 147, as it was found that the assessee had purchased immovable properties aggregating to Rs. 1,10,75,262/- during the financial year 2010-11, which were not disclosed in the return filed for A.Y. 2011-12. The details of the land purchases were collated from registered sale deeds and included Rs. 72,72,517/- Rs. 4,12,924/-, and Rs. 33,89,821/-. These lands were jointly purchased with other individuals. During reassessment proceedings, the Assessing Officer noted that the said investments were not reflected in the books of account nor was any explanation offered regarding the source of funds. The AO also held that the assessee failed to produce acceptable evidence to demonstrate that the land was agricultural in nature or that the claim of exemption under section 2(14)(iii) could be supported by competent certification. Consequently, an addition of Rs. 1,10,75,262/- was made under section 69 of the Act as unexplained investment. Penalty proceedings were also initiated under section 271(1)(c) for furnishing inaccurate particulars of income. 3. The AO f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpt agricultural income. The AO, however, treated the transaction as an adventure in the nature of trade and assessed the entire surplus as business income. Since the sale proceeds of Rs. 2,74,59,970/- were treated as business receipts, and the turnover thus exceeded the audit threshold under section 44AB, the AO held that the assessee was under statutory obligation to maintain books and get the accounts audited. The AO noted that the assessee had failed to maintain any books of account and had also not obtained audit under section 44AB. Show cause notices under section 274 r.w.s. 271B dated 17.12.2018 and 26.12.2018 were issued. As there was no response, the AO proceeded to levy penalty under section 271B amounting to Rs. 1,02,122/-, being 0.5% of turnover, vide order dated 28.06.2019, also approved by the Range Head. 6. In both assessment years, the assessee's appeals before the CIT(A), NFAC, were dismissed ex parte. The CIT(A) recorded that multiple notices were issued but remained non-complied with, and the assessee failed to substantiate his grounds. Relying on judicial precedents such as Estate of Late Tukojirao Holkar v. CWT (223 ITR 480) and New Diwan Oil Mills v. CIT (296 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case in levying interest u/s 234A/B/C of the Act. 7. The learned Id.AO has erred in law and on facts of the case in initiating penalty u/s 271(1)(c) of the Act. 8. The ld.AO has erred in law and on facts of the case in initiating penalty u/s. 271B of the Act. In ITA No. 450/Ahd/2024 1. The Id. CIT-(A) has confirmed the action of the Id. AO has confirmed the penalty on the appellant under section 271B of the Act. The Id. AO during the course of assessment proceedings has held that since the purchases turnover of the appellant exceeds the limit for audit of books of accounts u/s. 44AB of the Act and thus the Id.AO imposed penalty on appellant. 2. The appellant is engaged in running a proprietary business wherein maintenance of books of accounts was not required statutorily, therefore the land purchased were not recorded in the books of account. The appellant had treated the said land as Investment. The Id.AO during the course of assessment proceedings change the nomenclature of the land and treated the same as stock in trade and thus concluded that as a business activity of purchase and sale of land. Thus the Id.AO during the course of assessment has imposed penalty under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he action of the Id. AO has confirmed the penalty on the appellant under section 271B of the Act. The Id. AO during the course of assessment proceedings has held that since the purchases turnover of the appellant exceeds the limit for audit of books of accounts u/s. 44AB of the Act and thus the Id.AO imposed penalty on appellant. 3. The appellant is engaged in running a proprietary business wherein maintenance of books of accounts was not required statutorily, therefore the land purchased were not recorded in the books of account. The appellant had treated the said land as Investment. The Id.AO during the course of assessment proceedings change the nomenclature of the land and treated the same as stock in trade and thus concluded that as a business activity of purchase and sale of land. Thus the Id.AO during the course of assessment has imposed penalty under section 271B. 3. The appellant does not has any intention to carry out any business activity in relation to real estate and thus the said land has not been treated as stock. 4. The penalty order passed by the Id.AO for the penalty amounting to Rs. 1,02,122/- is bad in law and thus the penalty imposed by the Id.AO needs to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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