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TMI Blog2016 (1) TMI 708X X X X Extracts X X X X X X X X Extracts X X X X ..... gricultural income and agreed to pay tax. CIT(A) has failed to consider the facts in proper perspective and accordingly, we confirm the penalty levied by the Assessing Officer - Decided against assessee Levy of penalty for the disallowance of development liability - CIT(A) deleted the penalty - Held that:- In the present case, the assessee has made an erroneous claim of deduction, which indeed pointed out by the Assessing Officer during the course of 147 assessment proceedings and the assessee has not given proper explanation. Therefore, the claim was added back to the returned income of the assessee. It is not the case that the assessee has furnished true particulars of income in the returned filed by the assessee. Therefore, the decision of the Hon’ble Supreme Court in the case of Mak Data P. Ltd., vs. CIT (supra) relied on by the Department in the grounds of appeal squarely applies to the facts of the present case in hand. Accordingly, we find that there is no illegality in initiating penalty proceedings. In view of the above, we set aside the order passed by the ld. CIT(A) and confirm the penalty levied by the Assessing Officer.- Decided against assessee - I.T.A.No.26/Mds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... do not go to prove that the assessee has earned agricultural income. The assessee has not admitted any gross agricultural income showing expenses towards earning such income. The onus lies on the assessee to prove that the assessee filled the soil, for sowing seeds, irrigated and fertilized the land for rearing crops and earned an income from harvest on which agricultural taxes were paid, however, the assessee has not discharged its onus to prove that agricultural operations were carried out to earn the income which is claimed as exempt. Since the assessee has not furnished proper evidence for the agricultural activities amounts to furnishing of inaccurate particulars, the Assessing Officer has levied penalty under section 271(1)(c) of the Act. 4. On appeal, the ld. CIT(A), after considering the submissions of the assessee, has deleted the penalty levied by the Assessing Officer. 5. On being aggrieved, the Revenue is in appeal before the Tribunal. The ld. DR, while relying on the decisions in the case of MAK Data Pvt. Ltd. v. CIT 358 ITR 593 (SC), Addl. CIT v. Bhoopathy 113 ITR 188 (Mad) and L.H. Sugar Factory and Oil Mills (P) Ltd. v. CIT 125 ITR 293 (SC), has submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ops. After the lands were taken possession by the assessee company, it is possible that the agricultural income can be derived by harvesting of the standing crops. If we have to agree with the observations of the ld. CIT(A) that the assessee has derived agricultural income by harvesting of the standing crops, the ld. CIT(A) has not made any mention as to how the assessee has harvested the standing crops without incurring any expenditure. What is the crop standing at the time of purchase of the land was not mentioned so as to at least presume that the said crops were harvested on free of cost and earned income. 8. Before the ld. CIT(A) and also in the Cross Objection, the assessee has relied on the decision of the Hon ble Supreme Court in the case of CIT V. Raja Benoy Kumar Sahas Roy 32 ITR 466, wherein the Hon ble Supreme Court has elaborately considered about the agriculture and determined income earned as agriculture income. The assessee has shown expenditure incurred for earning the income. Further, in the case of Kameshwar Singh v. CIT 32 ITR 587, the issue pertains to whether the income earned out of forestry is agricultural income or not. Therefore, both the case law relie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tc. The Assessing Officer has observed that the commitment to build club house, etc. are not in the nature of ascertained liability and in no way it can be said that the liability needs to be incurred either during the year under consideration or in the future. He has also observed that the assessee has simply made the provision due to the fact that the income for the year stands reduced and could not prove any commitment made to its clients by way of any written agreement to support the claim that the accounting provision has to be made for the expenditure during the year under consideration. Since the provisions created in the accounts, which are not allowable under the Income Tax Act and, the assessee has not actually incurred the expenditure, which is only an obligatory for future requirement, the Assessing Officer levied penalty for making wrong claim in the return of income. 12. On appeal, the ld. CIT(A), after considering the submissions of the assessee, has deleted the penalty levied by the Assessing Officer. 13. On being aggrieved, the Revenue is in appeal before the Tribunal. The ld. DR has submitted that the assessee has created the provision to reduce the returned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they acted only on the advice of the professional Chartered Accountants. 17. Further in the case of Pankaj Rathi v. CIT [2011] 245 CTR 218, the Hon ble Calcutta High Court has held that if the assessee has not furnished the correct particulars of his income, penalty under section 271(1)(c) can be levied on the ground that there was mens rea involved. 18. Moreover, in the grounds of appeal, the Department has relied on the case law in the case of MAK Data Pvt. Ltd. v. CIT (Civil Appeal No. 9772 of 2013. The Hon'ble Supreme Court has observed that the Explanation 1 to Section 271(1)(c) of the Act raises a presumption of concealment, when a difference is noticed by the Assessing Officer between the reported and assessed income. The burden is then on the assessee to show otherwise, by cogent and reliable evidence. When the initial onus placed by the explanation, has been discharged by him, the onus shifts to the Department to show that the amount in question constituted income and not otherwise. Voluntary disclosure does not release the assessee from the mischief of penal proceedings. The law does not provide that when an assessee makes a voluntary disclosure of his conceale ..... X X X X Extracts X X X X X X X X Extracts X X X X
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