2015 (8) TMI 1384 - AT - Income Tax

Cancellation of penalty under section 271(1)(c) - capital gain addition - Held that - The facts of the case of assessee are admittedly identical as have been decided in the case of Shri C.S. Atwal Vs CIT, Ludhiana 2015 (7) TMI 878 - PUNJAB & HARYANA HIGH COURT issue of exigibility to capital gain in favour of the assessee and against the revenue. In the case of the present assessee also, the assessee has, of his own filed another return of income disclosing all the material facts relating to transfer of plot and has disclosed capital gains on the amount which was actually received during the year under consideration. The dispute was left regarding transfer of plot and the amount which was not yet received through the agreement to sell. The ld. CIT(Appeals), therefore, on proper appreciation of the facts and material on record, correctly held that it is not a case of concealment of income or furnishing inaccurate particulars of income. - Decided in favour of assessee.

Summary

Issues:
Levy of penalty under section 271(1)(c) of the Income Tax Act for assessment year 2008-09 based on concealment of income or furnishing inaccurate particulars.

Analysis:

1. Background of the Case:
- A Housing Society entered into a joint development agreement for land development.
- The appellant, a member of the society, declared income in the return for A.Y. 2008-09.
- Discrepancies in the computation of income led to penalty proceedings under section 271(1)(c).

2. Assessment and Penalty Proceedings:
- The Assessing Officer computed capital gains based on the total consideration received or receivable.
- Penalty proceedings initiated due to discrepancies in income disclosure.
- The Assessing Officer levied a penalty of Rs. 20,25,000 which was challenged by the assessee.

3. Decision of CIT(Appeals):
- The CIT(Appeals) analyzed the explanation provided by the assessee.
- The CIT(Appeals) considered the bonafide nature of the explanation and the disclosure of material facts.
- The CIT(Appeals) canceled the penalty, citing that the explanation was reasonable and the facts were disclosed in the revised return.

4. Arguments and Rulings:
- The appellant argued that the penalty was correctly canceled due to the disclosure of all particulars.
- Reference was made to a similar case decided by the Hon'ble Punjab & Haryana High Court.
- The Tribunal observed that the facts were identical to the mentioned case where the issue was decided in favor of the assessee.

5. Tribunal's Decision:
- The Tribunal noted the similarity with the High Court's decision and upheld the cancellation of the penalty.
- The Tribunal found no concealment of income or furnishing of inaccurate particulars.
- The explanation provided by the assessee was considered bonafide, leading to the dismissal of the departmental appeal.

6. Conclusion:
- The departmental appeal was dismissed, affirming the cancellation of the penalty by the CIT(Appeals).
- The Tribunal's decision was based on the bonafide nature of the assessee's explanation and the disclosure of all material facts.

This detailed analysis outlines the case background, assessment, penalty proceedings, CIT(Appeals) decision, arguments presented, the Tribunal's ruling, and the final conclusion regarding the levy of penalty under section 271(1)(c) of the Income Tax Act for the assessment year 2008-09.