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TMI Blog2021 (6) TMI 544X X X X Extracts X X X X X X X X Extracts X X X X ..... taking various grounds of appeal. 2. Brief facts of the case are that the assessee filed return of income on 06.10.2014 declaring taxable income of ₹ 54,57,990/- and the case was selected for scrutiny through CASS and statutory notices were issued to the assessee. The assessee is an individual engaged in contract business. During the course of assessment proceedings the Assessing officer observed that the assessee has shown gross receipts of ₹ 8,63,10,567/- and shown net profit of ₹ 54,96,874/- which comes to 4.3% of the net profit and the assessee was asked to prove the expenditure claimed into profit loss a/c but the assessee was unable to prove the same. Therefore, the Assessing officer rejected the books of accounts u/s 145(3) of the Act and estimated net profit on percentage basis and calculated the assessed income of ₹ 81,54,518/- . The Assessing officer passed order u/s 271(1)(c) on 29th June,2017 and imposed a penalty of ₹ 5 lakhs which is 100% of the tax evaded. 3. Being aggrieved from the order of the penalty appeal passed by the Assessing officer the assessee filed appeal before the CIT(A) who dismissed the appeal of the assesee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above period. The total cost of land available for sale measuring 13100 square yards after leaving space for roads and parking etc. including estimated development charges works out at ₹ 721 per square yard. During the year under consideration, the assessee had sold four plots measuring 982.5 square yards for ₹ 7,86,000 on rates varying from ₹ 456 per square yard to ₹ 1,056 per square yard and earned net profit of ₹ 77,600. The above profit has been disclosed in the return under the head 'business income'. The sale rates are supported by sale deeds. The irregularities in the shape of the land had been attended to and due to various reasons there was difference in the rates. The Judgment of the Hon'ble Supreme Court in the case of K.P. Varghese v ITO [1981] 131 ITR 597/7 Taxman 13 was relied on in which it was held that it is only the registered value of any property which has to be considered and the onus of establishing that any amount was received over and above the amount declared is always on the Revenue. It was further submitted that addition is merely on the estimate basis so it is not a conclusive evidence to prove that assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2008. Therefore, it is a fit case of concealment of income and penalty should have been levied. The learned Departmental Representative submitted that since revised return was filed after detection made by the AO, therefore, the disclosure of ₹ 45 lakhs is not voluntary and bona fide and in support of his contention, he has relied upon the following decisions : (i) Decision of Hon'ble Punjab Haryana High Court in the case of Prempal Gandhi v. CIT [2011] 335 ITR 23/[2009] 185 Taxman 64. (ii) Decision of Hon'ble Punjab Haryana High Court in the case of CIT v. Bansal Abhushan Bhandar [IT Reference Nos. 272 to 276 of 1995, dated 6-11-2006]. (iii) Decision of Hon'ble Punjab Haryana High Court in the case of Rajesh Chawla v. CIT [2006] 154 Taxman 364. (iv) Unreported decision of Hon'ble Punjab Haryana High Court in the case of Shveta Nanda v. CIT [2011] 336 ITR 298/[2012] 211 Taxman 129 (Mag.)/[2011] 13 taxmann.com 133. As regards the penalty imposed on difference in the valuation of sale of property, the learned Departmental Representative merely relied upon the order of AO. 6. On the other hand, the learned counsel for the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 48 ITR 306/211 Taxman 40/25 taxmann.com 400 in which though everything had been mentioned in the tax audit report but was not disallowed while preparing the computation of income, it was held that it was a case of inadvertent mistake and no penalty was leviable for concealment. He has also relied upon the decision of the Hon'ble Punjab Haryana High Court in the case of CIT v. Ravail Singh Co. [2002] 254 ITR 191/122 Taxman 831 held 'that Penalty- Concealment of income-Additions made on basis of estimate and not on concrete evidence of concealment of income-Penalty not leviable under ' s. 271(1)(c) IT Act, 1961, s. 271(1)(c), Explanation'. 7. He has also relied upon the decision of Hon'ble Supreme Court in the case of CIT v. Reliance Petroproducts (P) Ltd. [2010] 322 ITR 158/189 Taxman 322 held that 'No information given in return found to be incorrect-Making incorrect claim-Does not amount to concealment of particulars IT Act, 1961, s. 271(1)(c)\ 8. The learned counsel for the assessee, therefore, submitted that all facts and surrender of the amount were already within the knowledge of the Revenue Department and part of the record and it was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t-show the surrender of ₹ 45 lakhs but advance tax of ₹ 15 lakhs paid on surrendered amount of ₹ 45 lakhs has been disclosed in the computation of income filed with the original return of income. The learned counsel for the assessee also pointed out as per the order sheet dt. 24th Dec, 2008, pointed out by learned Departmental Representative the assessee has filed cash flow chart and balance sheet on 16th Dec, 2008 before AO wherein the surrendered income had been reflected and the copy of the same is filed at pp. 6 and 7 , of the paper book. It would, therefore, show that prior to the order sheet dt. 24th Dec, 2008, the AO did not raise any query on this issue and prior to that the assessee had already declared and disclosed that ₹ 45 lakhs had already been disclosed to the Revenue Department is also accounted for in the cash flow statement (capital account) and the balance sheet. The assessee, therefore, disclosed all the particulars of the surrender of amount as well at the stage of the assessment. The assessee on realizing the mistake has immediately filed the revised return on 26th Dec, 2008 including the surrender amount of ₹ 45 lakhs in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id advance tax as well as self-assessment tax not taking into account the deduction claimed under s. 80P(2)(a)(iii) of the Act. It was evident from the facts that the assessee's claim was bona fide and that all the particulars relating, to the computation of income had been disclosed. Thus, the Tribunal rightly cancelled the penalty levied. 9.4 The Hon'ble Punjab Haryana High Court in the case of CIT v. Bhandari Silk Store. [2011] 337 ITR 153/[2012] 20 taxmann.com 439 held that 'the Tribunal while upholding the deletion of penalty on surrender of ₹ 2 lakhs had categorically recorded that the surrender related to the stocks included under the definition of other valuable articles of things and that the condition enumerated under Expln. 5 to s. 271(1)(c) were fulfilled. It was also not disputed that the statement of the assessee was recorded under s. 132(4) of the Act on the date of search. Therefore, the Tribunal was right in upholding the order of the CIT(A) cancelling the penalty on ₹ 2 lakhs. It had been noticed by the Tribunal that the assessee had disclosed the amount of ₹ 1,25,000 at the time the search party was learning the premises ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO for making estimated addition of ₹ 1,38.750. It is well-settled law that for estimated addition, no penalty is leviable. The particulars of sale of plots were also disclosed in the return of income filed by the assessee. The Hon'ble Madras High Court in the case of CIT v. K.R. Chinni Krishna Chetty [2000] 246 ITR 121/[2002] 120 Taxman 871 held that 'Mere revision of income to a higher figure by assessing authority does not automatically warrant inference of concealment of income'. 11. Considering the above discussion,. we are of. the view that learned CIT(A) had properly appreciated the facts and material on record and correctly cancelled the penalty on this issue also. : 12. In view of the above discussion, we do not find any infirmity in the order of learned CIT(A) in cancelling the penalty. 8.1. Respectfully following the above decision, we set aside the order of the CIT(A) and direct the AO to delete the penalty levied u/s 271(1)(c) of the Act. Accordingly, the ground raised by the assessee on this issue is allowed in above terms. 9. In the result, the appeal of the assessee is allowed. Order pronounced on 15/06/2021. - - TaxTM ..... X X X X Extracts X X X X X X X X Extracts X X X X
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