Construction business penalty appeal allowed for Assessment Year 2005-06 due to bonafide disclosure

The Tribunal allowed the appeal against the penalty imposed under section 271(1)(c) for Assessment Year 2005-06. The appellant, engaged in construction business, declared nil income initially but later disclosed income during assessment due to the inability to produce evidence. The Tribunal found the appellant's explanation bonafide, considering the nature of the construction business and voluntary disclosure. As there was no evidence of concealment by the Revenue, the penalty was deemed not applicable, and the appeal was allowed.

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Issues Involved: Appeal against penalty u/s. 271(1)(c) for A.Y. 2005-06.

Summary:
1. Background: The appellant, engaged in construction business, filed return declaring nil income for A.Y. 2005-06. Assessment u/s. 143(3) resulted in total income of Rs. 16,33,000 after additions. Penalty of Rs. 2,75,400 u/s. 271(1)(c) was imposed and upheld by CIT (A).

2. Appellant's Argument: Assessee, a builder, accepted booking advance for a row house but failed to produce evidence for a specific case. Assessee voluntarily offered the amount as income during assessment to avoid litigation. Assessee's explanation deemed bonafide, relying on relevant case laws.

3. Revenue's Argument: Assessee did not provide evidence as required, failing to discharge the onus. Citing precedent, Revenue supported the penalty imposition.

4. Judgment: Tribunal noted the assessee's construction business and acceptance of booking advances. Assessee's voluntary declaration of income due to inability to produce evidence was considered bonafide. No evidence of concealment by the Revenue. Citing relevant case law, the penalty was deemed not applicable, and the appeal was allowed.

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