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TMI Blog2013 (11) TMI 824X X X X Extracts X X X X X X X X Extracts X X X X ..... loss of revenue, by reason of concealment of particulars of income - Thus, the assessee filed inaccurate particulars of income and concealed income – Penalty under section 271(1)(c) leviable – Decided in favor of Revenue. Quantum of penalty u/s 271(1)(c) of the Income tax act being 125% of the tax concealed – Held that:- The penalty imposed @ 125% which is reduced to 100% of tax sought to be evaded. Therefore, A.O. is directed to re-calculate the penalty @ 100% - Decided against the Revenue. - ITA Nos. 1509, 1510 & 1511/Ahd/2005 - - - Dated:- 1-11-2013 - Shri D. K. Tyagi And Shri T. R. Meena,JJ. For the Petitioner : Shri J. P. Jhangid, Sr. D.R. For the Respondent : Assessee Shri M. K. Patel, A.R. ORDER Per : Shri T.R.Meena, Accountant Member These are three appeals at the behest of the Revenue which have emanated from the orders of CIT(A)-II, Baroda, dated 14th March, 2005 for all assessment years. The sole ground of appeal is against deleting the penalty of Rs.1,99,780/- in A.Y. 1997-98, Rs.8,48,859/- in A.Y. 1998-99 Rs.7,15418/- in 1999-2000 u/s.271(1)(C) by the CIT(A)-II, Baroda. 2. The A.O. observed as under: In this case, the return of inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same time the assesses claimed land development expenses in this three years which are as under : A.Y.1997-98 - Rs.3,99,555/- A.Y.1998-99 - Rs.19,40,248/- A.Y.1999-2000 - Rs.16,35,241/- These land development expenses is the difference which has escaped assessment if income is considered as per VDIS declaration. The details of these expenses were called for at the time of scrutiny assessment and assesses shown inability to furnish any vouchers, bills, etc., in support of his claim for these land development expenses. It was submitted by the assessee at that time out of Rs.39,75,044/- Rs.18,00,000/- were paid to various authorities for obtaining ULC permission and clearing of land from litigation, etc. For remaining expenses it was submitted by the assessee that these expenses are incurred as Misc. expenses and for payment to Shri S K Pathan and his family. As the assessee has failed to submit any vouchers, bills, etc., any evidence in support of his claim of expenses and the fact that certain amount has been utilized for illegal payment which are not allowable as per explanation 1 of Section 37(1) of the IT Act, therefore, the same were disallowed at the time of assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had failed to substantiate its explanation in regard to books of account being correct and complete and held failed through its bonafide and had also failed to prove that all material facts were disclosed. He imposed penalty @ 125% of tax sough to be evaded at Rs.1,99,780/- for A.Y. 1997-98, Rs.8,48,859/- for A.Y. 1998-99 Rs.7,15418/- for 1999-2000. 3. Being aggrieved by the order of the A.O., the assessee carried the matter before the CIT(A) who had deleted the penalty by observing as under: 3.43 Relying on the legal pronouncements and considering the fact of the appellant s case, I hold that there is no justification to impose penalty inferring that appellant had concealed income or filed inaccurate particulars of income invoking Explanation-1 and more particularly when (i) The appellant has filed returns voluntarily showing profit from sale of land after claiming expenses and at all stage of assessment and re-assessment has furnished the explanation for claim of land development expenses and other expenses. (ii) The addition made based on information received to reopen the assessment for Asst. Year 97-98 has been deleted and income of original assessment is directe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) of the IT Act. Further, there is no other evidences were produced that these expenses were incurred wholly and exclusively for the purpose of business. The Hon ble ITAT had confirmed the addition in A.Y. 97-98, land expenses are paid to the Government authority for getting clearance from and even assessee could not produce any detail in regard to these expenses. The A.O. had rightly invoked Explanation 1 to Section 37(1) of the Act being illegal expenditure but same cannot be allowed. The lower authorities have rightly disallowed this expenditure and they confirmed the same in ITA No.48/Ahd/2005 for A.Y. 1997-98. The appellant also filed the appeal against the bifurcation of income in ITA Nos. 1305, 1306 1307/Ahd/2011 for A.Ys. 97-98, 98-99 99-00, which was dismissed by the Co-ordinate D Bench, Ahmedabad, vide order dated 26.06.2009. Therefore, he prayed to confirm penalty in all three years. At the outset, ld. Counsel argued that these expenses were incurred expenditure to the tune of Rs.39.53 lacs which was related to year 1994. There was a search in place of at the residence premises of Kishorebhai on 16.12.1995 as per Annexure A to page 3 4. The land sale transactio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s.271(1)(c). (vi) Assessed filed explanation but was (a) Not ablve to substantiate it. (b) Not able to prove it bonafide. (c) From the record it cannot be said that assessee had disclosed all the facts relating to his explanation and material to computation of his total income (Details of payment made of development charges were infact with held by assessee). (vii) AO imposed penalty u/s.271(1)(c) and explanation 1 thereto (viii) Ld. CIT(A) deleted the penalty on the basis of incorrect and irrelevant facts an observations, despite the fact that presumption raised against assessee by clause (A) (B) of Explanation 1 to section 271(1)(c) was not rebutted by assessee by virtue of his failure as mentioned in (a) (b) (c) in (6) above. He further relied in ITAT A Bench, Pune decision in Kanbay Software India (P.) Ltd. vs. DCIT [2009] 31 SOT 153 (Pune), wherein it was held that whether judgment in the Union of India vs. Dharmendra Textile LProcessors [2008] 306 ITR 277, does not make a radical change in Scheme of Section 271(1)(c) but it re-emphasizes paradigm shift on burden of proof as brought about by Explanation to Section 271(1)(c) Held, yes. Thus, he prayed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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