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TMI Blog2024 (7) TMI 341X X X X Extracts X X X X X X X X Extracts X X X X ..... sment year involved. In this view of the matter, we are of the considered opinion that the CIT(A) / NFAC is not justified in sustaining the penalty levied by AO u/s 271(1)(c) - Decided in favour of assessee. - Shri R. K. Panda, Vice President And Shri Vinay Bhamore, Judicial Member For the Assessee : Shri Nikhil S Pathak For the Department : Shri Sourabh Nayak, Addl.CIT ORDER PER R. K. PANDA, VP : This appeal filed by the assessee is directed against the order dated 08.02.2024 of the CIT(A) / NFAC, Delhi relating to assessment year 2006-07. 2. Although a number of grounds have been raised by the assessee, however, these all relate to the order of CIT(A) / NFAC in confirming the penalty of Rs. 32,89,952/- levied by the Assessing Officer u/s 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as the Act ). 3. Facts of the case, in brief, are that the assessee is a firm and engaged in the business of promoters and builders. It had filed its return of income on 31.10.2006 declaring total income at Rs. 3,96,070/-. The Assessing Officer passed order u/s 143(3) of the Act vide order dated 29.08.2008 accepting the returned income filed by the assessee. Subsequently, a search a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0011567. Perusal of the same shows that the assessee has not made any cash withdrawals during the year. Prima facie, it is apparent that assessee has incurred the cash expenditure for purchase of land at Baner out of its undisclosed sources of income. On the basis of the information, statement of purchasers, and the seized materials examined by me, I have reason to believe that income chargeable to tax has escaped assessment to the extent of Rs. 97,74,069/- in the hands of the assessee by reason of the failure on ;part of the assessee to disclose fully and truly all material facts necessary for its assessment for A.Y. 2006-07 as per the proviso to Sec. 147A of the IT Act. 4. In response to the said notice u/s 148 of the Act, the assessee filed its return of income on 30.04.2013 declaring total income at Rs. 3,96,070/- which was declared originally. The statutory notices u/s 143(2) and 142(1) of the Act were issued and served on the assessee, in response to which the assessee filed various details as called for from time to time. During the course of assessment proceedings, the Assessing Officer asked the assessee to explain as to why the cash paid to Tapadiya family totaling to Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 215/sq ft has been adopted which is stamp duty valuation. Further, notings on this page mention that the agreement value consideration of Rs. 7,13,800/- @ 215/sq ft has been received by Shri YBT by cheque and the balance consideration of Rs. 17,76,200/- @ Rs. 535/sq ft has been received in instalments. Further, from the registered sale deed agreement for the said plot of land, seized as page no 2 to 23 of Bundle, it becomes clear that the said plot has actually been sold by you to M/s. S.K. Bhansali and Associates for a consideration of Rs. 7,13,800/-. Thus, on collective reading of Seized page no 1 of Bundle and seized page no 2 to 23 of Bundle, it becomes clears that YBT mentioned in seized page no 1 of Bundle no 1 refers to Yash Bhagwandas Tapadiya. In the light of foregoing facts, you are requested to go through these seized pages and explain this transaction in detail and explain the tax treatment accorded by YBT to the sale consideration received by him out of this sale transaction. A.18 As pointed out by you in the question itself, it is correct that the word YBT mentioned on seized page no 1 of Bundle refers to me i.e. Yash Bhagwandas Tapadiya. This seized page of B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and submitted that the Tribunal under identical circumstances has deleted the penalty levied by the Assessing Officer u/s 271(1)(c) of the Act which is upheld by the CIT(A) / NFAC. 9. The Ld. Counsel for the assessee further submitted that although the Tribunal has sustained the addition made by the Assessing Officer and upheld by the CIT(A) / NFAC, however, the penalty proceedings and assessment proceedings are separate and distinct and the assessee can always make a new plea during the penalty proceedings. He submitted that despite request by the assessee to cross-examine Ajay Tapadiya, he did not appear before the Assessing Officer on the appointed date although the assessee was very much present. It is not known as to why and how Tapadiya had agreed to have received the cash in the impugned assessment year. 10. The Ld. DR on the other hand heavily relied on the orders of the Assessing Officer and Ld. CIT(A) / NFAC. He submitted that Tapadiya family has categorically accepted that they have received cash over and above the cheque amount. Further, they have offered the cash amount received by them to tax. So far as the cross-examination of Tapadiya is concerned, the Ld. DR subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is as to whether the assessee could challenge taxability of the impugned alleged on-money payment of Rs. 1,42,65,106/- in assessment year 2010-2011 itself or not ? We find that this tribunal s coordinate bench s order in group of appeals ITA.Nos.804 to 809/PN./2012 Shri Mangesh Tupe, Pune vs. ACIT decided on 30.04.2013 has rejected the Revenue s very contentions as under : 26. The point made out by the assessee is that having regard to the aforesaid, whereby MTDCL was granted irrecoverable license to commence development of the land on 26.03.1999 itself, then as per the decision of the Hon ble Bombay High Court in the case of Chaturbhuj Dwarkadas Kapadia (supra), transfer within the meaning of Section 2(47) of the Act takes place and the corresponding capital gain become taxable in assessment year 1999-2000 in terms of Section 45(i) of the Act. The Hon ble Bombay High in the aforesaid judgement had an occasion to consider the import of the expression transfer as per the Section 2(47) of the Act in case of a development agreement between the land owner and a developer. As per the Hon ble Bombay High Court, if a transaction involved the allowing of the possession of any immovable pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment proceedings cannot be considered as conclusive so as to fasten penal liability under Section 271(1)(c) on the assessee. In support of the aforesaid proposition, we may rely upon the ratio of judgement of the Hon ble Bombay High Court in the case of Jainarayan Babulal vs. CIT 170 ITR 399 (Bom.) In view of the aforesaid discussion, in our considered opinion, the CIT(A) made no mistake in deleting the penalty imposed by the Assessing Officer with respect to the income by way of Long Term Capital Gain of Rs. 30,12,878/- on sale of land. Accordingly, the order of the CIT(A) is affirmed and the appeal of the Revenue in ITA No. 771/PN/2012 is dismissed. 6.1. It is thus clear that nothing prevents the assessee from challenging correctness of the impugned penalty proceedings regarding taxability of the quantum addition in the corresponding assessment year. This is indeed restricted to the penalty proceedings only. We keep in mind this fine distinction and proceed to note that there is no seized material pinpointing the assessee having paid the impugned on-money component of Rs. 1,42,65,106/- in assessment year 2010- 2011. We are recording this clinching finding of fact based ..... X X X X Extracts X X X X X X X X Extracts X X X X
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