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TMI Blog1994 (7) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... h Court in Manubhai A. Sheth v. N. D. Nirgudhar [1981] 128 ITR 87 and thereby cancelling the penalty of Rs. 17,580 imposed under section 271(1)(c) ? " The brief facts relevant to the disposal of the present reference are that the assessee is the karta of the Hindu undivided family. There was a bigger-Hindu undivided family in the name of Harbux and Sons which had agricultural lands. The said land was partitioned amongst the members of the Hindu undivided family. The said lands were subsequently sold to a co-operative society on the basis of which the Income-tax Officer found that the assessee is liable for capital gains tax. The land was sold for Rs. 56,150 and the cost of the land as on January 1, 1954, was shown at Rs. 23,118. Deductio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 by the Income-tax Appellate Tribunal. The Income-tax Officer found that the assessee had concealed the particulars of his income by furnishing inaccurate particulars thereof. He placed wrong facts before the Income-tax Officer and claimed residential land as agricultural land, which was evident from the allotment letter issued by the society and, therefore, penalty under section 271(1)(c) of Rs. 17,580 was imposed by the Income-tax Officer. In the appeal before the Appellate Assistant Commissioner, the levy of penalty was set aside relying on the decision of Hindustan Steel Ltd. v. State of Orissa [1972] 83 ITR 26 (SC) and also for the reason that the information for computation of capital gains was furnished by the assessee. The Reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was no liability of tax on this ground the penalty under section 271(1)(c) was held not leviable. Section 2(1A) of the Act defines agricultural income. Section 2(14) defines capital asset. By the Finance Act, 1970, agricultural lands were excluded from the definition of the term " capital asset ", but this exclusion is not applicable to land which is comprised within the jurisdiction of a municipality or cantonment board which has a population of not less than 10,000 persons in their voters' list according to the last preceding census and also in any area within such a distance not being more than 8 kms. from the local limits of any municipality or cantonment board as may be notified in the Official Gazette. By the Finance Act, 1970, unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... D. Nirgudkar [1981] 128 ITR 87, and thereby cancelling the penalty of Rs. 17,580 imposed under section 271(1)(c) of the Act. Accordingly, the reference is answered in favour of the Revenue and against the assessee. No order as to costs. The Appellate Assistant Commissioner, in the present case, had set aside the penalty on the basis of the decision given by the apex court in the case of Hindustan Steel Ltd. v. State of Orissa [1972] 83 ITR 26 as well as on merits, that all the particulars have been disclosed by the assessee. The Income-tax Appellate Tribunal has not taken into consideration both the points, i.e., the merits of the case, and the judgment of the apex court, but has proceeded altogether on a different point which was not ra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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