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TMI Blog2015 (12) TMI 134X X X X Extracts X X X X X X X X Extracts X X X X ..... It gives impression that the assessee has no intention to conceal any income. Therefore, this is not a fit case to impose penalty u/s 271(1)(c). Accordingly, we cancel the penalty levied by AO u/s 271(1)(c) and allow the appeal of assessee. - Decided in favour of assessee. - ITA No. 312/Hyd/2015, ITA No. 313/Hyd/2015 - - - Dated:- 9-10-2015 - SHRI P.MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER For The Assessee : Shri D.V. Anjaneyulu Ms. P. Pravallika For The Revenue : Shri Y. Sesha Srinivas ORDER PER S. RIFAUR RAHMAN, A.M.: Both these appeals filed by different assessees are directed against separate orders, both, dated 23/03/2015 of ld. CIT(A) VII, Hyderabad for the AY 2006-07 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he said consideration of ₹ 109.50 lakhs was received vide two cheques on 22nd and 29th June 2005 and deposited in the bank accounts of the assessee. c) The assessee converted these amounts into FDs, earned interest and admitted the same under other sources for the year under consideration. d) The assessee, along with his brother, as Directors and partner of M/s Hoe Leather Garments Pvt Ltd., and M/s Hansa Overseas Enterprises, agreed for the OTS with the creditor banks on 29.12.2005. Accordingly, the assessee utilized the sale proceeds, after more than six months of their receipt, towards clearing dues outstanding in the name of Company and Firm. e) To avoid the question of taxability of the capital gains in the hands of its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidering assessee s contentions, the observations of AO are as under: 5.2 The assessee tried to evade tax on sale of property at each stage of the proceedings and in the contrary claimed that he has furnished voluntarily all the information relating to the sale of . property and has not concealed any income. However, this claim of the assessee is bereft of any merit. It is not a case that the assessee has disclosed the sale of property in his individual return of income filed for the subject assessment year and claimed the same as exempt, as per his understanding. It is only during the course of remand report proceedings in the case of the Company, the assessee brought out the issue of sale of property for the purpose of explaining the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. Ld. CIT(A) after discussing the issue at length confirmed the penalty levied by AO by observing that the claim of bona-fide belief of assessee in not offering the gains to tax was not at all proved with any iota of basis and it is only to escape the burden of tax that the assessee went on to furnish part information/part material to suit his convenience and has not acted as per the claim of bona-fide belief. 8. Still aggrieved, assessee is in appeal before us. 9. Before us, ld. AR submitted that the CIT(A) failed to appreciate and consider the credible evidence and explanation offered by assessee regarding the non-disclosure of capital gains in the original return or return in response to section 148 with bonafide belief that there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted that the assessee has to keep the funds in the bank for short term till the OTS arrangements are approved by the bank. As soon as the OTS is sanctioned by the bank, the proceeds were used to clear the OTS. The assessee has also offered the interest income for the interim period. It shows the intention of the assessee. 9.3 Ld. AR also submitted that the assessee has not maintained separate books of account and transferred the sale proceeds to discharge the OTS, he was of the bonafide belief that no capital gain tax applicable on this sale transaction. 9.4 Ld. AR also submitted that the Hon ble ITAT, Hyderabad in ITA No. 1386/Hyd/2014 others has stated as under: The Hon ble Supreme Court in the cases of R.M. Arunachalam vs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ders of revenue authorities, submitted that assessee has concealed his particulars of income in as much as the gain was not offered to tax in the return of income. He, therefore, submitted that AO was justified in levying penalty u/s 271(1)(c) of the Act. 11. We have heard both the parties and perused the material on record as well as the orders of revenue authorities. After considering the facts and material on record, it is the fact that the assessee has offered the surplus out of OTS to Bank in the books of the company/firm, which is more than the sale under dispute, to tax and also offered to tax the interest income. It shows that there is no intention to conceal the income. The ld. AR also insisting that the sale transaction does no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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