TaxTMI 
TaxTMI 
2015 (1) TMI 730
X X X X Extracts X X X X
X X X X Extracts X X X X
....offered to tax by the assessee in the return of income. The exemption under S.54F was claimed by the assessee on account of purchase of a plot of land for Rs. 4,02,93,000, registration expenses of Rs. 38,27,935 and construction of house on the said plot of land amounting to Rs. 1,25,00,000. The amount of Rs. 1,25,00,000 on account of construction of house was claimed to be paid by the assessee to one M/s. Robo Infrastructure Pvt. Ltd. and as per the information received by the Assessing Officer, the said amount was not eligible for exemption under S.54F. He, therefore, issued a notice under S.148 to the assessee on 18.11.2011, in response to which no return of income was filed by the assessee. The assessee however, appeared before the Assessing Officer in response to the notice issued under S.143(2) during the course of re-assessment proceedings and produced evidence to show that the amount to the extent of Rs. 39,19,855 only was spent on the construction of house. It was accepted by the assessee that the balance amount of Rs. 85,80,145 paid to M/s. Robo Infrastructure Pvt. Ltd. was not spent on the construction of house and the same having been refunded by the said party, it was n....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n on account of long term capital gain by way of restriction of the assessee's claim for exemption under S.54F was not accepted by the assessee voluntarily, and it was only as a result of enquiries made by him, which revealed that the claim of the assessee for exemption under S.54F was not fully admissible. The Assessing Officer held that the case of the assessee thus was a fit case to impose the penalty under S.271(1)(c) and accordingly he imposed penalty of Rs. 47,35,554 being 100% of the tax sought to be evaded by the assessee in respect of the addition made by way of restricting the claim for exemption under S.54 F. 5. The penalty imposed by the Assessing Officer under S.271(1)(c) was challenged by the assessee in appeal preferred before the learned CIT(A), and the following submissions were made on its behalf before the learned CIT(A) in support of the case that penalty imposed by the Assessing Officer under S.271(1)(c) was not sustainable- "After paying the amount of Rs. 1,25,00,000/- to the builder on 03.10;2008, as some differences of opinion cropped up between the builder and the appellant, there was no progress in the construction of the residential house and ultimately....
X X X X Extracts X X X X
X X X X Extracts X X X X
....39,14,847/-. The appellant agreed for disallowance of Rs. 1.25 Crore as he was clearly given to understand that due to the dispute with the builder, there was no chance for completing the construction of the house within the period of time allowed under the provisions of Sec. 54F of the LT. Act. In fact, the Assessing Officer wanted to disallow the amount of Rs. 1.25 Crore due to wrong nomenclature used by the appellant and not by unearthing any undisclosed income. All the particulars were furnished by the appellant in the return of income filed itself without leaving any scope to the Assessing Officer to discover any concealment. It is not the case of the Assessing Officer that the appellant has concealed any particulars of his income. Mere using of wrong nomenclature does not ipso-facto warrant initiation of concealment penalty proceedings. The appellant humbly submits that at the time of filing the return of income the amount of Rs. 1.25 Crore was paid to the builder. Such payment is for construction of a residential house. The claim in the return was therefore, justified. The assessee agreed for disallowance of the said amount as the builder did not construct the house as expe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t qualify for deduction u/s 54F. Yet, in order to evade taxes he claimed, deduction on both the counts as discussed above.' The' story about dispute with the company is totally self-serving in nature and does not rest on any pillar of evidence. Moreover, dispute or 'no dispute, deduction has to be allowed if the house is completed within the time period specified and also on the actual amount spent on the construction of the house. It is beyond human probability that the appellant would have no knowledge about the extent to which his house had been constructed and the amount of money which had been spent in the construction of the house. It is very clear from the facts of the case that the appellant had planned the entire strategy in such a manner so as to evade taxes. It is not a bone fide mistake, rather it is a well-planned tax evasion device. Had the assessing officer not conducted scrutiny of the case and had he not obtained the relevant information, taxes on an amount of Rs. 6 crore, especially on the amount of Rs. 1.25 crore would never have been paid by the appellant. Therefore, this is a fit case for levy of penalty u/s. 271(1)(c), and the same is accordingly c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion under S.54F. 8. The learned Departmental Representative, on the other hand, strongly relied on the orders of the authorities below in support of the Revenue's case that the claim for exemption under S.54F partly having been wrongly made by the assessee, penalty provisions of S.271(1)(c) are clearly attracted. He contended that there was no basis whatsoever to pay the lump sum amount of Rs. 1.25 crores to the contractor for the construction of house, and this payment was actually made by the assessee, in order to make a wrong claim for exemption under S.54F. He contended that this wrong claim made by the assessee came to light only as a result of re-assessment proceedings initiated by the Assessing Officer and having been cornered by the Assessing Officer, the assessee was left with no choice but to withdraw partly his claim for exemption under S.54F. He contended that it is thus not a case where the assessee has withdrawn its claim voluntarily and it is a fit case to impose penalty under S.271(1)(c) . He read out and relied on the specific adverse findings recorded by the learned CIT(A) in paragraph 4.3 of the impugned order and urged that the same may be taken into considera....
X X X X Extracts X X X X
X X X X Extracts X X X X
....at the assessee had got an opportunity to withdraw his excess claim for exemption under S.54F, when notice under S.148 was issued by the Assessing Officer in the month of January, 2011, and in spite of having full knowledge that the claim made by it in the original return for exemption under S.54F was excessive, the assessee did not avail the said opportunity, and agreed for the addition by way of restriction of the claim for exemption under S.54F only during the course of re-assessment proceedings, when he was cornered by the Assessing Officer by making specific enquiries, which clearly revealed that the claim of the assessee for exemption under S.54F was excessive. Having regard to all these facts of the case, we find merit in the contention of the learned Departmental Representative that it is not a case where the assessee can be said to have voluntarily surrendered his excessive claim for exemption under S.54F. 11. It is a well settled position of law that the concealment of income envisaged in S.271(1)(c) is to be inferred from the return of income filed by the assessee, and since the penalty proceedings under S.271(1)(c) in the present case were initiated by the Assessing Of....