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TMI Blog2019 (8) TMI 453X X X X Extracts X X X X X X X X Extracts X X X X ..... e amounts received by her attracts the provisions of section 44AB. Under these facts and circumstances of the case, we are of the opinion that the explanation given by the assessee is bonafide and also justified, no penalty can be levied u/sec. 271B of the Act. In a similar circumstances, the coordinate bench of the tribunal in the case of K.V.V. Prasad [ 2019 (6) TMI 1095 - ITAT VISAKHAPATNAM] who is also entered into agreement along with the assessee, held that no penalty can be levied u/sec. 271B. - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... akh u/sec. 271B of the Act. 4. Before us ld. counsel for the assessee has submitted that during the year under consideration, the assessee entered into only one transaction which is sale of land, which resulted into capital gains, but the same is treated by the Assessing Officer as business income and submitted that levy of penalty u/sec. 271B in respect of a single transaction is not justified. He also submitted that in the similar circumstances, the coordinate bench of the tribunal in the case of K.V.V. Prasad Vs. ITO in ITA No. 78/VIZ/2019, dated 21/06/2019 deleted the penalty levied by the Assessing Officer u/sec. 271B of the Act. 5. On the other hand, ld.DR has strongly supported the orders of the authorities below. 6. We have heard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, held that no penalty can be levied u/sec. 271B. For the sake of convenience, the relevant portion of the order is extracted as under:- "7. We have heard both the parties and perused the material placed on record. For the sake of clarity and convenience we extract the facts of the case from page No.2 of the penalty order which reads as under: "The assessee entered into an agreement dated 10.10.2002 with one Shri RK Mittal of Hyderabad for purchase of land admeasuring 9507 sq.yds at Somajiguda, Hyderabad and paid an initial advance of ₹ 50,000/- and made certain payments subsequently. Shri RK Mittal was the decree holder for the property in question. Subsequently, a tripartite agreement was entered into between 1) RK Mittal (sell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 008-09. The assessee undertook to pay the consequential taxes before 31.12.2010. The assessee however did not pay any taxes thereafter." 7.1 We also extract the observations of the AO for which the AO treated the business transactions instead of capital gains and levied the penalty holding that the assessee is liable for penalty u/s 271B of the Act. "The following observations made in the Assessment Order dated 30.12.2010 and Appellate order dated 30.11.2011 are relevant: 1. The assessee while entering into an agreement for purchase of land from RK Mittal is fully aware that Shri Mittal is only a decree holder and that the land in question is in litigation. 2. During the course of scrutiny proceedings, the assessee himself has admit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which clearly establishes the fact that the assessee has been carrying out the business of purchasing of lands in litigation and selling them at a higher price where risk and margins are high. Therefore, the purchase of land in question can no way be termed as an investment, but is only a stock in trade. 8. The consideration received by the assessee represented consideration received in relinquishment of rights acquired through an agreement entered into with RK Mittal. Even the buyers, M/s Fortune Infra P.Ltd are fully aware that the assessee cannot improve upon the title. Whatever right that he had acquired by virtue of the agreement dated 10.10.2002 is being transferred for a definite consideration. 9. As far as the assessee is conce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iness income'. That was the reason that the assessee did not get his accounts audited as required u/s 44AB of the Act. There is no dispute that the transaction was single transaction. No other expenditure was also claimed by the assessee. The AO did not bring any other material to support that the assessee has carried on the business in the earlier year or subsequent year in the assessment order. There is no issue of complexity involved in the receipts of the assessee. The assessee is a mechanical engineer, as observed from the assessment order and he is not engaged in the business, there are no other business transaction carried on by the assessee as brought out by the AO in the assessment order. Therefore, we hold that the assessee did no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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