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TMI Blog2003 (4) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... alty imposed on the assessee under section 271(1)(c) - - - - - Dated:- 16-4-2003 - Judge(s) : R. K. ABICHANDANI., K. M. MEHTA. JUDGMENT The judgment of the court was delivered by R.K. ABICHANDANI J.- The Income-tax Appellate Tribunal has referred the following questions at the instance of the High Court under section 256(2) of the Income-tax Act, 1961: "1. Whether the Appellate Tribunal is right in law and on facts in deleting the penalty imposed by the Income-tax Officer under section 271(1)(c) of the Income-tax Act, 1961, and confirmed by the Commissioner of Income-tax in appeals? 2. Whether the facts circumstances and legal provisions, do not justify the imposition of the penalty under section 271(1)(c) of the Income-tax Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acquired by it from the aforesaid firms. The Income-tax Officer inquired from the assessee as to how the value of Rs. 16,50,000 was fixed for land and building and how the price was fixed for movables acquired by the assessee from the outgoing firms which were the partners. It was stated by the assessee before the Income-tax Officer that the price of the land and building was arrived at on the basis of the valuer's report as per which the structure was valued at Rs. 4.62 lakhs and the land at Rs. 10,68,900. As regards movables the assessee stated before the Income-tax Officer that the value was fixed by mutual consent between the assessee and the retiring partners. The Income-tax Officer held that cost of the assets shown by the assessee wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax stood at Rs. 24,407 which included disallowance of Rs. 29,213 and, therefore, for the purpose of the Explanation to section 271(1)(c) of the Act, the correct income worked out to a loss of Rs. 4,806. It was held that by reducing the claim for depreciation in the instant case, there was no loss to the Revenue inasmuch as the effective income for the purpose of the said Explanation was determined at a loss and therefore no tax liability was involved as a result of the claim put forward by the assessee. The Tribunal held that the burden placed on the assessee could be said to have been discharged and the Explanation had no application to the facts of the case. Since the assessee had shown the value of building with land at Rs. 16,50,000 wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2] 253 ITR 216 where the assessee had concealed the particulars of its income by not revealing that the amount of interest paid to the so-called depositor was in fact interest paid to the partner and made an effort to avoid disallowance under section 40(b) of the Act, and it was held that the Tribunal was justified in confirming the penalty imposed by the Income-tax Officer under section 271(1)(c) of the Act. The decision of this court in the case of A.M. Shah and Co. v. CIT [1999] 238 ITR 415 was cited for the proposition that penalty proceedings can be initiated where the Income-tax Officer or the Appellate Assistant Commissioner was satisfied in the course of any proceedings under the Act that there has been concealment of income. If he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of movable assets, it appears that the revaluation is made on the basis of the price of the assets mutually agreed. It is not the case of the Revenue that the agreement was sham. It appears that the written down value was also mentioned against each of the items. The assessee had revalued assets as mentioned in para. 6 of the order of the Tribunal which shows the nature of the assets, the original price, written down value and the value at which the movables were taken. When the written down value was mentioned and there was no dispute about the correctness of the original price indicated, the Income-tax Officer had sufficient material before him to decide whether to allow depreciation on the written down value or to accept higher valu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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