9911796707
TMI Blog2012 (10) TMI 280X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue. Thus, it is clear that no material was found by Revenue to hold that the explanation offered by assessee was false. Therefore, assessee’s case does not fall within the ambit of Part-A of Explanation. So far as Part-B is concerned, it is found that assessee offered an explanation and also substantiated it. Therefore, Part-B is also not applicable. In view of above, assessee’s case does not fall within the ambit of Explanation 1 to Sec. 271(1) (c) and no penalty can be levied by merely disbelieving explanation given by the assessee - Decided in favor of assessee X X X X Extracts X X X X X X X X Extracts X X X X ..... ital gain in the return of income amounting to Rs.3,14,658/- but the same was subsequently offered as business income amounting to Rs.14,27,300/-. The A.O. was of the view that by this action of assessee, the assessee has furnished inaccurate particulars of income. Further, the act of the assessee of declaring business profit on sale of land as capital gains was considered by A.O. to be a deliberate default on the part of the assessee. He accordingly levied a penalty on the concealed income of Rs.11,12,642/- (Rs.14,27,300 - 3,14,658). Aggrieved by the action of the A.O. assessee preferred appeal before the CIT (A). CIT (A) upheld the action of the A.O. for the reason that during the course of penalty proceedings no submissions were made by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f income. The act of assessee was therefore a deliberate act on the part of assessee and therefore the penalty u/s. 271(1)(c) was rightly levied. 6. We have heard the rival contentions and perused the material on record. The factual position is that in the return of income filed on 30-11- 2003, the profit on sale of land was offered as capital gain instead of business income. During the course of assessment proceedings, the assessee on realizing the mistake had suo moto offered the income as business income. The A.O. had also taxed the profit as business income as offered by assessee without any change. The Act of the assessee of declaring the profit on sale of land as capital gains instead of business profits was considered by A.O. to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... particulars have been concealed. The first Clause (A) contemplates failure to offer an explanation or offer of an explanation which is found to be false. The second situation covered by Clause (B) relates to a position that the assessee is not able to substantiate the explanation offered by him. Thus the two situations are independent and separate. Part-A of the Explanation would be applicable when (i) where a person fails to offer an explanation; or (ii) where a person offers an explanation which is found by the A.O. or CIT (A) to be false. Part (B) of the explanation would be applicable when (i) where a person offers an explanation but he is unable to substantiate the same; (ii) and he fails to prove that such explanation is bonafide a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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