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TMI Blog2018 (9) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Department by upholding the action of the Ld. CIT(A) in deleting the penalty in dispute. - decided in favour of assessee - ITA No. 2559/Del/2015 - - - Dated:- 29-8-2018 - Shri Pramod Kumar, Accountant Member And Shri Sudhanshu Srivastava, Judicial Member Appellant by : Shri Ravi Kant Gupta, Sr. DR Respondent by : Sh. Sandeep Sapra, Adv ORDER Per Sudhanshu Srivastava, Judicial Member This Appeal is preferred by the Department against the order dated 27.2.2015 passed by the Ld. CIT(Appeals), Dehradun for the A.Y. 2005- 06. The Ld. CIT(A) has deleted the penalty of ₹ 14,90,000/- imposed u/s. 271(1)(c) of the Income Tax Act, 1961. 2. The brief facts of the case are that assessee filed return of income declaring total income of ₹ 1,49,520/- on 27.3.2006 which was processed u/s. 143(1) of the Act on 31.3.2006. Later, the case of the assessee was taken up under compulsory scrutiny. Thereafter, the assessment was completed on total income of ₹ 26,89,020/- against a returned income of ₹ 1,49,520/-. During the course of assessment, the A.O. observed that the assessee had introduced a capital of ₹ 41 lakhs on account of sale of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i.e. 50% of ₹ 31,69,000/- was explained and the rest ₹ 25,15,500/- remained unexplained and the same was added to the income of the assessee. 2.1 Aggrieved, with the assessment order, the assessee preferred appeal before the Ld. CIT(A), who vide his order dated 18.5.2011 held that: the AO proceeded to verify the claim of the assessee about introduction of capital as per the return of income. The AO has not substituted anything from his own side while giving his finding on the genuineness of the transactions resulting in the flow of funds as claimed by the assessee. The AO has again gone by the facts in the return of income in giving a finding about the relevant financial year of the transaction and in examining only those persons who have been claimed by the assessee to have advanced sums of money to him. It is again seen that the AO has rightly concluded about the unverifiable nature of the transactions claimed by the assessee and has rightly brought the same to tax u/s 68 of the Act considering that the transactions claimed did not pass the test laid down in the case Shankar Industries Vs. CIT 114 ITR 689 (Cal.). Accordingly, it was held that the action of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and therefore, no penalty was imposable. The AR further submitted that the facts of the case were identical as the dispute was regarding the validity of sale deed to which both the assessee and his son were parties. The Ld. AR further drew our attention to the findings recorded by the ITAT in the case of the assessee s son wherein, it had been held that there was nothing in the agreement to sell to indicate that there was a transfer of the plot within the meaning of section 2(47) of the Act at the time signing of the agreement. The AR further submitted that apart from this all the facts were before the AO and no concealment of income could be alleged to have been committed on the part of the Assessee and neither had any inaccurate particulars of income been furnished. The AR also placed reliance on the findings of Ld. CIT(A) in this regard. 5. We have heard the rival submissions and perused the material on record. The findings of the Ld. CIT(A), while deleting the penalty in dispute are contained in para no. 13, 14 15 of the impugned order, and the same are being reproduced hereunder for ready reference:- 13. The facts that are clear are that the assessee did enter into ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... money the sale of land, he is not able to offer proof of the source as the audit trail is missing. However, going by the theory of preponderance of probability, it is clear that the excess money lying in the account of the small retail trader who had sold over 1.153 hectares of land, would be from the sale of this land and since this land is agricultural land and is exempt from capital gains, no tax would be leviable on account of this money under the Income Tax Act. 14. With regard to the issue regarding consideration of sales of agricultural land of ₹ 25,15,500/- in the F.Y. 2004- 05, my Ld. Predecessor has held that there is nothing in the agreement for sale to indicate that there was a transfer of the plot within the meaning of section 2(47) of the I.T. Act, 1961 at the time of signing the agreement. In view of this finding, the entire difference in capital cannot be said to arise in the assessment year 2005-06 and the capital gains on account of the sale deeds that have been executed in the F.Y. 2005-06 can only be brought to tax in the A.Y. 2006-07. 15. What emerges from the above facts is that there has not been any concealment of income by the assessee, i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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