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2012 (12) TMI 62 - AT - Income TaxPenalty u/s. 271(1)(c) of the Act capital gain Held that - Assessee had shown Short Term Capital Gain on sale of one flat and also showed advances of Rs. 7,00,000/- against sale of another flat - assessee entered into an agreement with M/s. Celica Investment & Trading Co. Pvt. Ltd. (herein after referred as Celica) and surrendered its tenancy right. In lieu thereof the assessee got from M/s. Celica in the form of 8 flats admeasuring 4055 Sq. ft - it was a Long Term Capital Gain on transfer of tenancy rights - assessee initially contended that tenancy right was surrendered in assessment year 1994-95 but it was held by Tribunal on the basis of the fact that surrender of tenancy had taken place in assessment year 2001-02 and accordingly, Long Term Capital Gain has arisen to assessee in the assessment year 2001-02 - there was concealment of particulars of income by assessee to the extent of Long Term Capital Gain penalty upheld Limitation - Held that - Penalty proceedings has been initiated by AO on the basis of fresh assessment order dt. 21.12.2009. The assessee has not disputed said fresh assessment order in any appeal. Hence, penalty proceedings as per clause (c) of Sec. 275(1) of the Act could be passed on or before 30.6.2010. Since penalty order is passed on 25.6.2010, it is well within time as provided u/s. 275 of the Act.
Issues Involved:
1. Limitation on the penalty order. 2. Justification of penalty on Long Term Capital Gain. 3. Justification of penalty on Short Term Capital Gain. Issue-wise Detailed Analysis: 1. Limitation on the Penalty Order: The assessee contended that the penalty order is barred by limitation as per Sec. 275 of the I.T. Act. The Ld. CIT(A) held that the period of limitation commenced from the date of the fresh assessment order (21.12.2009) and was to expire either on 31.3.2010 or 30.6.2010, whichever was later. Since the penalty order was passed on 25.6.2010, it was within the time limit. The Tribunal upheld this view, agreeing that the fresh penalty proceedings were initiated based on the fresh assessment order, making the penalty order within the prescribed time limit under Sec. 275 of the Act. 2. Justification of Penalty on Long Term Capital Gain: The assessee argued that the Long Term Capital Gain arose in the assessment year 1994-95 and not in 2001-02. However, the Tribunal found no evidence supporting this claim and upheld the AO's action of bringing the Long Term Capital Gain to tax in the current year. The Ld. CIT(A) confirmed the penalty on Long Term Capital Gain of Rs. 1,21,65,000/-, stating that the assessee concealed income by not declaring the Long Term Capital Gain in the return. The Tribunal agreed, noting that the assessee made a false claim about the timing of the surrender of tenancy rights and failed to disclose the correct income, thereby justifying the penalty. 3. Justification of Penalty on Short Term Capital Gain: The Ld. CIT(A) held that there was no concealment regarding the Short Term Capital Gain of Rs. 3,59,629/- as the assessee had offered a higher income for tax. The Tribunal upheld this view, agreeing that the assessee had not concealed particulars of income related to the Short Term Capital Gain, and thus, no penalty was justified on this score. Conclusion: The Tribunal dismissed the appeal filed by the assessee, confirming the penalty on the Long Term Capital Gain while setting aside the penalty on the Short Term Capital Gain. The penalty order was deemed within the limitation period, and the concealment of income regarding the Long Term Capital Gain justified the penalty.
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