9911796707
TMI Blog2016 (9) TMI 1203X X X X Extracts X X X X X X X X Extracts X X X X ..... rores. Even the dates of the two agreements entered into by the assessee with the companies on 22.02.2008 and 29.01.2009 go on to support his argument that his belief was bonafide initially, that this amount of ₹ 13 crores was a determined liability in A.Y. 2008-09 and became income in A.Y. 2009-10. In fact, the assessee paid taxes on this amount in A.Y. 2009-10 to the tune of ₹ 3,13,24,962/- on 27.09.2009. We find that Ld. CIT(A) in his impugned order has noted that the AO accepted the voluntary surrender of the assessee of an amount of ₹ 13 crores for A.Y. 2008-09 in his order u/s. 143(3) of the Act dt. 26.11.2010. Furthermore, the AO also accepted the assessee's revised return for A.Y. 2009-10, in the assessee had reduced his income by the said ₹ 13 crores vide his Order u/s. 143(3) of the Act dt. 20.12.2011. AO held the assessee is guilty of concealment of income of ₹ 13 crores for A.Y. 2008-09. The AO mentioned in the penalty order that the assessee had filed an appeal before CIT(A) against this addition. In fact, the assessee accepted this addition of ₹ 13 crores since he had voluntarily offered it for taxation for A.Y. 2008-09. In view of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... instead, he filed appeal for initiation of penalty proceedings u/s. 271(1)(c) of the Act and aggrieved by the order of the Assessing Officer, the assessee filed appeal against quantum before the Ld. CIT(A) on the-remaining additions. The ld. CIT(A) vide order dated 05.10.2011 in Appeal No. 142/10-11 allowed relief on the following grounds: (a) Short term capital gain of ₹ 4,08,800/- is reduced by ₹ 1,15,730/- as short term loss u/s. 70(2) and confirmed the balance addition. (b) Disallowance on account of deemed dividend of ₹ 18,60,000/- is reduced to ₹ 17,00,000/-. (c) Dismissed the appeal on the issue of initiation of penalty u/s. 271(1)( c). Accordingly, show cause notice for imposing penalty was issued on 10.12.2012 fixing the hearing of the case on 17.12.2012. The reply given by the assessee to the said show-cause notice was considered but not accepted by the Assessing Officer who later imposed a penalty of ₹ 4,57,53,537/- on the assesse u/s. 271(1)(c) of the Act vide his order dated 25.3.2013. 3. Aggrieved with the aforesaid penalty order, assessee preferred an appeal before the Ld. CIT(A), who vide his impugned order dated 13.1.201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubsequently, as a measure of settlement of disputes between the appellant and the two companies, another Agreement being Deed of Settlement recording the Consent Terms between the parties was executed on 29.01.2009. As per this Consent Deed, both the companies i.e. M/s. Selene Construction Pvt. Ltd. and M/s. Juventus Estates Pvt. Ltd. agreed to forego and give up all the claims with reference to the amount of ₹ 13 crores. (g) The appellant, under a bona fide belief that this claim made by him in A.Y. 2008-09, had become not payable in A.Y. 2009-10 had written back this liability of ₹ 13 crores in A.Y. 2009-10 and paid taxes thereon in accordance with the law. (h) Thereafter, the appellant, on professional advice, withdrew the claim of expenses of ₹ 13 crores made in A. Y. 2008-09 and offered it for taxation in that year. Simultaneously, he also revised his Return of Income for A.Y. 2009-10 by reducing his taxable income with an equivalent amount. 4.4 A careful consideration of the chronological facts, as narrated above, make it abundantly clear that the appellant was under a bona fide belief that ₹ 13 crores was a determined liability for A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this case as enumerated above, I am of the considered opinion that there is no case for imposition of penalty u/s. 271(1)(c) on the appellant with reference to this amount of ₹ 13 crores. The AO is therefore, directed not to impose any penalty u/s. 271(1)(c) with reference to this amount of ₹ 13 crores. 7.1 After going through the findings of the Ld. CIT(A), as aforesaid, we are of the considered view that assessee was under a bona fide belief that ₹ 13 crores was a determined liability for A.Y. 2008-09 in accordance with the terms of the Full and Final Settlement Agreement dt. 22.02.2008 signed by him with the two companies. It was noted that he offered this amount for taxation in A.Y. 2009-10 under a bonafide belief that in accordance with the terms of Deed of Settlement recording the Consent Terms between the parties dt. 29.01.2009, this amount had become not payable and he accordingly, wrote back this amount in his books of accounts and paid taxes thereon in accordance with law. Thereafter, on professional advice, he has offered it for taxation in A.Y. 2008-09 and simultaneously, reduced it from his income for A.Y. 2009-10. Under these facts and circu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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