TaxTMI 
TaxTMI 
2016 (4) TMI 513
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....gs. The assessee developed a project known as 'Madhuban Saicity' in Talegaon. The assessee is also engaged in the purchase and sale of land. The assessee filed its return of income for the assessment year 2008-09 on 13-10-2008 declaring total income of Rs. 27,61,300/-. The case of the assessee was selected for scrutiny and accordingly notice u/s. 143(2) was issued to the assessee on 21-08-2009. During the course of scrutiny assessment proceedings the Assessing Officer observed that the assessee had sold two plots i.e. Plot No. A-70 MIDC and Plot No. D-3/P-1 MIDC. In the profit and loss account the assessee declared profit from sale of above plots as Rs. 16,22,159/-. The assessee had claimed certain expenses for the development of the plots. On examination of the records, the Assessing Officer found that Plot No. A-70 MIDC was purchased by the assessee along with the building measuring 883 sq. mtrs. The same was sold without making any further addition. Plot No. D-3/P-1 in MIDC was purchased along with building measuring 2455 sq. ft. The said plot was sold along with building on as is where as basis. The expenditure claimed by the assessee for the development of the above said plots....
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....l the transactions are recorded in the books. However, the assessee is not having vouchers in support of expenditure claimed. 4. Shri Hitendra Ninawe representing the Department vehemently supported the order of Commissioner of Income Tax (Appeals) in confirming the disallowance. The ld. DR submitted that the assessee was not able to substantiate the expenditure claimed for the development of plots. The Assessing Officer has recorded a categoric finding that no development activity was carried out by the assessee on the plots or the buildings. Moreover, the assessee conceded before the Assessing Officer that he is not able to support the expenditure claimed for development of the plots. 5. We have heard the submissions made by the representatives of rival sides and have perused the orders of the authorities below. A perusal of the impugned order and the assessment order shows that the addition of Rs. 58,40,941/- has been made on the basis of letter dated 30-11-2010 filed by the assessee before the Assessing Officer. The assessee has admitted in the said letter that they are unable to support the expenditure incurred on the development of land. Once, the addition has been made....
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....mar Surana Vs. Assistant Commissioner of Income Tax, 39 CCH 138 (Kol-Trib.); iv. Godavari Townships (P.) Ltd. Vs. Deputy Commissioner of Income Tax, 148 ITD 463 (Visakha-Trib.); v. Heranba Industries Ltd. Vs. DCIT, ITA No. 2292/Mum/2013 for assessment year 2009-10 decided on 08-04-2015. 8. On the other hand the ld. DR submitted that it is not a case where the additions have been made on mere estimations. The assessee voluntarily admitted that they are unable to substantiate the expenditure. Since, the assessee had wrongfully claimed excessive development expenditure, penalty u/s. 271(1)(c) has been rightly levied. The ld. DR submitted that the Hon'ble Supreme Court of India in the case of Mak Data (P.) Ltd. Vs. Commissioner of Income Tax reported as 358 ITR 593 (SC) has held that voluntary disclosure does not release assessee from mischief of penal proceedings u/s. 271(1)(c) of the Act. 9. We have heard the submissions made by the representatives of rival sides and have perused the orders of the authorities below. We have also considered the decisions on which reliance has been placed during the course of submissions. The ld. AR of the assessee has challenged the pe....
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....tipulated in Section 271(1)(c) do not exist as such he is not liable to pay penalty. The practice of the Department sending a printed farm where all the ground mentioned in Section 271 are mentioned would not satisfy requirement of law when the consequences of the assessee not rebutting the initial presumption is serious in nature and he had to pay penalty from 100% to 300% of the tax liability. As the said provisions have to be held to be strictly construed, notice issued under Section 274 should satisfy the grounds which he has to meet specifically Otherwise, principles of natural justice is offended if the show cause notice is vague. On the basis of such proceedings, no penalty could be imposed on the assessee. 60. Clause (c) deals with two specific offences, that is to say, concealing particulars of income or furnishing inaccurate particulars of income. No doubt, the facts of some cases may attract both the offences and in some cases there may be overlapping of the two offences but in such cases the initiation of the penalty proceedings also must be for both the offences. But drawing up penalty proceedings for one offence and finding the assessee guilty of another offence or....
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....e of CIT v. Virgo Marketing P. Ltd. reported in [2008] 171 Taxman 156, has held that levy of penalty has to be clear as to the limb for which it is levied and the position being unclear penalty is not sustainable. Therefore, when the Assessing Officer proposes to invoke the first limb being concealment, then the notice has to be appropriately marked. Similar is the case for furnishing inaccurate particulars of income. The standard proforma without striking of the relevant clauses will lead to an inference as to non-application of mind." In the present case the Assessing Officer has issued notice u/s. 274 r.w.s. 271(1)(c) of the Act without striking of the clauses which are not relevant. The notice is ambiguous. Further a perusal of penalty order shows that the Assessing Officer has not specified the information concealed by the assessee. Mere mentioning of the phrase that the assessee has 'concealed income as well as furnished inaccurate particulars of income' is not sufficient to comply with the provisions of section 271(1)(c). The Assessing Officer has to subjectively explain as to what information assessee has concealed and/or what inaccurate particulars are filed in the retu....