2016 (7) TMI 701

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....of Rs. 95. 74 lakhs. The AO completed the assessment on 31/12/2009, u/s. 143 (3) of the Act, determining the income of the assessee at Rs. 3. 81 Crores. During the assessment proceedings, the AO found that assessee had received a sum of Rs. 4. 55 Crores from Pyramid retail Ltd and Rs. 5 lakhs from Maneck Dawer for surrendering rights offer premises situated at MM Estate, that the premises was owned by a Trust, that it had leased the premises to Moonshot Investment Corporation who entered sublet the premises to the assessee by agreement dated 14/08/1969, that Pyramid Retail Ltd. purchased the said premises from the owner and entered into an agreement with the assessee, that for surrendering the rights the assessee was paid a sum of Rs. 4. 55....

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....ons of the High Court and the Tribunal, that the assessee's case was not of surrender of tenancy, that it was never a tenant-it was a mere licence holder, that the case was not covered by the provisions of section 55 (2), that the note was appended to the competition of income filed along with the return. After considering the submissions of the assessee and the penalty order, the FAA referred to the explanation to the section 271(1)(c) and held that the assessment proceedings and the penalty proceedings were independent of each other, that as per the explanation the onus to establish that explanation offered by an assessee was bona fide and all the facts relating to same and the material to compute its income had been disclosed by it was ....

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....osed by the AO. 4. Before us, the Departmental Representative(DR) argued that the Tribunal had upheld the addition made by the AO in quantum appeal, that the assessee had concealed the particulars of income. The Authorised Representative(AR) supported the order of the FAA and stated that the assessee had disclosed all necessary facts in its return of income, that in the computation of income there was a note about a transaction in question, that the assessee had made a legal claim that was rejected by the AO, that the claim was made on a bona fide belief, that provisions of sec. 55(2)(a) of the act were not applicable, that it was not a case of tenancy by it was a matter of transfer of rights, that it was a debatable issue, that rejection ....

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....(c), it has to held that the explanation filed by the assessee is not tenable at all. But, mere stating that submissions are untenable is not sufficient. It has to be explained as to why same is unacceptable. The rejection of the explanation, filed by the assessee on cogent reasons is a precondition for imposing concealment penalty. We find that said pre-requisite is missing in the present case. No judicial authority is required to be cited to hold that assessment and penalty proceedings are different and conclusion drawn during assessment may be relevant but not binding for levying penalty u/s. 271(1)(c) of the Act. The purpose of assessment is to determine the amount of due taxes from an assessee, but penalty proceedings are initiated to....