TaxTMI 
TaxTMI 
2015 (7) TMI 562
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....sold part of land at S.No 277 situated in the industrial area at Maan, Pune to M/s W B Engineers Pvt. Ltd on 29-3-2005 for a consideration of Rs. 2,30,00,000/- and the balance portion of the said land was sold in the subsequent A.Y. 2006-07 to M/s. Global Infrastructure on 13-4-2005 for a consideration of Rs. 1,50,00,000/-. Thereafter the land was transferred to Sakal Papers Ltd for a consideration of Rs. 2,95,00,000/-. The assessee claimed that land to be of the nature of agricultural land as per sec 2(14)(iii) of the Act and accordingly the profit derived from its sale was claimed to be exempt and not liable to tax. The assessee filed the 7/12 extract of the land and contended that the land was agricultural land and the same was used for agricultural activities on which grass was cultivated and that the grass cultivation involved human labour and skill and was not grown spontaneously. 4. It was also submitted before the Assessing Officer that there was not much profit as expenditure was equal to the income and hence no agricultural income was declared. The assessee also claimed that she had incurred the expenditure on the development of the said land for the use of agricultural ....
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....he certificate obtained from the Asstt. Diiector, Town planning in respect of the distance of land was communicated to the assessee and in response the assessee had filed letter dated 16-12-2008 admitting the mistake and stated that the distance from the PCMC limit remained unquoted through oversight. The Assessing Officer thus objected for admitting the certificate obtained by the assessee from Kamgar Talathi dated 14-1-2010. The Ld. CIT(A) with respect to one of the issues i.e. of treatment of the gain/profit on sale of land accepted the contention of the assessee that the sale of the plot of land cannot be treated as an adventure in the nature of trade and held the same to be assessed under the head 'Capital gain'. However on the second issue whether the said land is an agricultural land the contention of the assessee was rejected and held that the land in question was within 8 kms of the PCMC limits. The Ld. CIT(A) also rejected the request of the assessee to admit the additional evidence furnished before him under Rule 46A. It may be pertinent to note that in further appeal filed by the assessee the Tribunal upheld the order of the Ld CIT(Appeals). In its observation r....
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....9,266/- for A.Y. 2006-07 after having satisfied that the assessee had concealed the particulars of income for both the assessment years i.e. A.Y. 2005-06 and A.Y. 2006-07. 9. Before CIT(A) it was submitted that the Assessing Officer is unsure of the fact whether it is concealment of particulars of income or furnishing inaccurate particulars of income and the assessment order refers to deliberate attempt to evade the tax whereas the penalty order refers to concealment of particulars of income. The assessee drew the attention of the CIT(A) to the statement of income and accounts which reflect the factum of sale of land and a noting below which shows that the assessee sold agricultural land beyond 8 kms from the local limits of municipal corporation and profit on the same being non-taxable not included in the computation of income. The assessee also drew the attention of the CIT(A) towards the observation of the ITAT Pune that on the issue of nature of land, whether it is agricultural or nonagricultural, the CIT(A) and the Assessing Officer have not given any clear finding. The assessee stated that on the issue of distance of 8 kms in paras 7 and 8 of the order, ITAT has clearly indi....
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....ed out by the Assessing Officer with the office of the Town Planning Agricultural Dept and the Asstt. Director of Town planning revealed that the said land was situated within 8 kms to the extent limit Chinchwad Municipal corporation (PCMC) w.e.f. 11-9-1997. The appellant on being confronted with the aforesaid fact admitted vide letter dated 16-12-2008 that it was a capital asset and the claim was bonafide mistake and there was no deliberate intention to evade tax. The appellant also stated that distance from PCMC limit remained un-noted due to oversight and hence made the wrong claim of exemption by mistake. It has already been seen that the said plot of land was purchased by the appellant when she was hardly 19 years old and who subsequently migrated to Chennai and her father being the sole controlling authority on the basis of power of attorney had also obtained loan amounting to Rs. 3.02 crores" from Janata Sahakari Bank, Pune on the hypothecation/mortgage of the said land. The appellant after having admitted the land to be a capital asset again challenged the action of the Assessing Officer before the Ld CIT(A) and again stated the land to be beyond 8 kms of the municipal corp....
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....lant in filing inaccurate particulars. Thus the case laws relied upon by the appellant even before the Assessing Officer of the apex court in CIT Vs Reliance Petroproducts P. Ltd, 322 ITR 158 is not applicable to the facts of the present case as in that case the details supplied by the assessee in the return was not found to be incorrect or erroneous and that was held to not attract penalty u/s 271(1)(c) as all relevant information was disclosed in the return of income filed by the assessee. In the present case the appellant has not disclosed all the relevant information in the return of income and rather deliberately chose to claim the income exempt by filing inaccurate particulars and thereby concealing the income as the details filed in the return were found to be incorrect. 3.5 The claim thus made was not bonafide rather it was with a malafide intent. A wrong claim by itself does not warrant penalty if the facts relating to the same are disclosed. In order to call the particulars as accurate the assessee must believe that the said particulars are accurate on fact and disclosure which has been made in any part of the return which is incorrect or false to the knowledge of the a....
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....not show the conduct of the appellant to be bonafide and innocent rather the contumacious conduct of the appellant can reasonably be inferred. 3.5.2 The other case of the apex court relied upon by the appellant before the Assessing Officer during penalty proceedings, of UOI Vs Rajasthan Spinning and Weaving Mills, 23 DTR 158 held that only conscious or deliberate wrong doing would attract penalty and on facts the aforesaid decision of the apex court in fact supports the present case as it has already been seen that the action of the appellant is of consciously and deliberately furnishing inaccurate particulars thereby concealed the income knowing fully well that the land in question was a capital asset u/s 2(14) the profit of which was taxable. The decision of Punjab & Haryana High' Court in the case of CIT Vs Rajiv Bhatara relied upon by the appellant, the assessee in that case had appended the copy of the cheque received from the Collector and the certificate obtained from Sub Divisional Engineer, PWD, wherein it was shown that the distance of the village in which the land of the assessee was situated 8.2 kms from the municipal limit of Sonepat Municipal, along with the ret....
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....010) 328 ITR 44 (Del). Where untenable claim for set off of carried forward loss was made in the case of a partner, such a claim could not be accepted as bona fide, so that penalty is exigible - ACIT Vs Dinesh Goel (2011)10 ITR (Trib) 330 (Del). 3.5.5 In ACIT Vs Kanchenjunga Advertising (P) Ltd (2011) 10 ITR 649 (Del), where a claim for bad debt was found to have been wrongly made and inferable in the fact of the case as a device adopted to mislead the Assessing Officer with relevant fact not disclosed, penalty is leviable. 3.6 In view of the above fact and circumstances of the case, the minimum penalty u/s 271(1)(c) of the Act, @ 100% of the tax sought to be evaded levied by the Assessing officer for A.Y. 2005-06 at Rs. 43,91,971/- and for A.Y. 2006-07 at Rs. 21.39.266/- is upheld and the ground of appeal no. 2 raised by the appellant is dismissed for both the years under consideration." 11. Aggrieved with such order of the CIT(A) the assessee is in appeal before us with the following grounds : "1. On the facts and in the circumstances of the case and in law the honourable Commissioner of Income Tax (Appeals) - II, Pune erred in confirming the penalty of Rs. 21,39,266/- lev....
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.... at a distance of approximately more than 25 kms from PMC and is approximately more than 9 kms from PCMC. 14.1 Referring to the decision of the Hon'ble Supreme Court in the case of Reliance Petroproducts Ltd. reported in 322 ITR 158 he submitted that the Hon'ble Supreme Court in the said decision has held that mere making of the claim which is not sustainable in law by itself will not amount to furnishing the inaccurate particulars regarding the income of the assessee. He also relied on the following decisions and submitted that under somewhat similar circumstances penalty has been finally deleted : 1. CIT & Another Vs. Manjunath Cotton Factory reported in 359 ITR 111 (Kar.) 2. CIT Vs. Escorts Finance Ltd. reported in 328 ITR 44 (Delhi.) 3. CIT Vs. Rajiv Bhatara reported in 360 ITR 121 (P&H) 4. ACIT Vs. Kanchenjunga Advertising Pvt. Ltd. reported in 51 SOT 125 (Delhi) (Tribunal) 5. ACIT Vs. Dinesh Goel reported in 52 SOT 132 (Delhi) (Tribunal) He accordingly submitted that the order of the CIT(A) upholding the penalty levied by the AO should be cancelled. 14.2 Referring to the additional ground filed by the assessee he submitted that since the Tribunal has categorically giv....
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....on gathered by him confronted the same to the assessee to which the assessee admitted her mistake vide letter dated 16-12-2008 and accepted that the said land in question cannot be treated as an agricultural land exempt from capital gain tax. The assessee also admitted that the land in question is within 8 kms of the Municipal limits. The relevant observation of the Assessing Officer in the assessment order for A.Y. 2006-07 at para 10 and 11 are as under : "10. On receipt of the above reply from the assessee this office has made the enquiries from the office of Town Planning & Valuation Department Pune Branch Pune and The Asstt. Director of Town Planning vide his office letter No. Mouje Mann/ Tal. Mulshi/ S.No. 277 No. 1,2,&3 / ADTP/5513/ dated 8.12.2008 has clarified that - 1) The land under transaction is situated within 8 K.M. from the extend limit of Pimpri - - Chinchwad Municipal Corporation with effect from the date 11.09.1997. 2) As per the modification under section 20 of Maharshtra Regional & Town Planning Act 1966 in the sanctioned Regional Plan of Pune district under Notification dated 23.6.2002 land is included in Industrial Zone. The above facts were commu....
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.... in the paper book as well as the submissions made before the AO, CIT(A) and the Tribunal that the assessee has consciously and deliberately concealed her particulars of income and furnished inaccurate particulars of income arising out of the sale of land. Even the Tribunal in its order has also mentioned that the assessee has taken contradictory stand before the AO and the CIT(A) on this particular aspect. In our opinion, it is a clear case of concealment of income and a deliberate act of omission on the part of the assessee in filing the inaccurate particulars of income. The note given by the assessee in her computation statement will not absolve the assessee from the mischief of penalty u/s.271(1)(c) of the I.T. Act since it was very much known to the assessee that the land in question was neither agricultural land nor situated beyond a distance of 8 kms from the municipal limits. Therefore, the various decisions relied on by the Ld. Counsel for the assessee will not be of any help to the assessee. Had it been a bonafide mistake or bonafide omission or commission, the decisions would have been applicable but when the particulars given by the assessee consciously to defraud the r....