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TMI Blog2018 (7) TMI 2132X X X X Extracts X X X X X X X X Extracts X X X X ..... d under section 143(1) of the I.T. Act, 1961. The case was selected for limited scrutiny through CASS for verification of large investment in property as compared to total income. The A.O. noted that the assessee is an individual and into the business of civil contractor. During the year under consideration, the assessee declared net profit of Rs. 13,99,908/- at the rate of 7.05% against total turnover/gross receipt of Rs. 1,98,57,475/- During the year, the assessee has purchased an immovable property for Rs. 60,00,000/- having ownership/share @ 18.75%. However, as per circle rate of the said property, purchase deed is valued at Rs. 1,68,89,000/-. The fact was confronted to the assessee, who readily offered the difference between Circle Rat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich is the year applicable to the assessment year under appeal. Prior to, there were no provision to deal with such a situation. The addition is made on account of deeming provision. Therefore, it is not a case of concealment of income or furnishing inaccurate particulars of income. Therefore, no penalty is leviable in the matter. He has relied upon the order of ITAT, Delhi Bench in the case of ITO vs. Shri Ajay Sharma ITA.No.995/Del./2016 dated 23.11.2017. He has submitted that notice issued prior to levy of the penalty dated 26.07.2016 under section 274 r.w.s. 271 is invalid and void as the same did not specify as to under which limb of Section 271(1)(c) penalty have been initiated. In support of this contention, he has relied upon the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of CIT vs. SSA's Emerald Meadows (2016) 73 taxmann.com 248 (SC). Therefore, the entire penalty proceedings under section 271(1)(c) of the Act are vitiated and penalty is liable to be cancelled. Further, the addition on account of purchases made at the lesser value of the Circle rate is introduced into the Act in Section 56(2)(vii)(b) w.e.f. 01.04.2014, which is applicable for the first time to the assessment year under appeal. The addition is made by the A.O. on account of deeming provisions. The A.O. has not brought any positive evidence on record to show that assessee has concealed the particulars of income or furnished inaccurate particulars of income. In the similar circumstances, in case of addition made under section 50C of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ught any evidence on record by which it can be established that assessee has received more than the amount shown to have received as per the sale deed. The assessee disclosed all the material facts before A.O. Therefore, it is not a case of levy of penalty. The assessee relied upon the decision of Hon'ble Kolkata High Court in the case of CIT vs. Madan Theatres Ltd., 260 CTR 75. The Ld. CIT(A) reproduced the judgment in the impugned order and found that penalty have been levied on account of addition made by applying the deeming provisions of Section 50C of the I.T. Act, which could not be construed as furnishing of inaccurate particulars or concealing the particulars of income. It was further found that for applying the provisions of Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e or furnished any inaccurate particulars. The valuation of the Stamp Valuation Authority is not a conclusive evidence of receipt of the money by assessee over and above what is recorded in the sale deed. The A.O. has not brought any concrete evidence of concealment of income in the order. The A.O. at the stage of assessment, simply applied the deeming provisions of Section 50C of the I.T. Act without bringing any evidence on record for concealment of income or furnishing inaccurate particulars by the assessee. In the absence of any positive evidence with respect to concealment of income, there were no justification for the A.O. to levy penalty in the matter. The Hon'ble Kolkata High Court in the case of CIT vs. Madan Teatres Ltd., (supra), ..... X X X X Extracts X X X X X X X X Extracts X X X X
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