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2016 (9) TMI 497 - ITAT HYDERABADPenalty levied under S.271(1)(c) - chargeability of capital gain tax - Held that:- We find that the assessee has filed the return of income on 24.5.2005, declaring income of ₹ 1,98,687, whereas the there was a search and seizure operation in the case of M/s. Om R.S. Wines on 12.4.2005. Even before the issuance of notice under S.153C of the Act, the assessee has declared the said transaction in the computation of income. The assessee has never taken the ground that the said land does not belong to the assessee herein, though it has raised such a ground before the CIT(A) in the first appeal preferred against the penalty order of the Assessing Officer. Thus, it is seen that the land belongs to the assessee and the transaction of development agreement and supplemental agreement was disclosed by the assessee to the Revenue authorities. Therefore, there cannot be a case of concealment of income. As regards furnishing of inaccurate particulars of income, it has been the stand of the assessee that the capital gains is chargeable to tax in the year in which the developer has given the possession of the developed area to the assessee. Though the Assessing Officer has recorded that the assessee has filed a letter stating that the built up area has been handed over to the assessee on 8.3.2004, it is not understandable as to how a building could have been completed within a period of three months of entering into the development agreement. It appears that the Assessing Officer has taken the supplemental agreement into consideration for presuming that the built up area has been apportioned to the assessee on 8.3.2004, as the supplemental agreement is entered for apportioning the developed area. Supplemental agreement alone cannot be taken as the proof of handing over of the built up area to the assessee. The Assessing Officer has accepted the assessee’s contention that the capital gains is chargeable to tax in the year of handing over of possession to the assessee. The Assessing Officer has come to the conclusion that capital gains have arisen in this year without proper verification of facts. Since the assessee has disclosed all the relevant facts to the Revenue authorities in is computation of income, we are of the opinion that there is no furnishing of inaccurate particulars of income or concealment or income. In the result, penalty levied under S.271(1)(c) is not sustainable - Decided in favour of assessee Undisclosed loan - Held that:- The assessee has disclosed the fact of advancing of loan to M/s. Om R.S. Wines in his return of income filed prior to issuance of notice under S.153C of the Act. Further, the assessee has also explained the availability of funds of ₹ 18,75,022 for assessment year ending on 31.3.2003 which fact has been considered by the Assessing Officer. The Assessing Officer has only presumed the property income to be ₹ 57,000 per year without taking into consideration the other sources of income. Since the assessee has disclosed the loan in the computation of income for the relevant assessment year, it is clear that there is no concealment of income or furnishing of inaccurate particulars of income.Since it has not been proved that the assessee has either furnished inaccurate particulars of income or concealed his income, the impugned penalty imposed by the Assessing Officer is not sustainable.- Decided in favour of assessee
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